Capital One Personal Loan Alternatives

Capital One doesn't offer personal loans, but many other reputable lenders do. Depending on your needs, credit score, and income, you can apply for a personal loan from a bank, credit union, or online lender. Alternatively, a credit card or home equity loan might be a better fit. This guide will cover your borrowing options and how to compare lenders so you can make an informed choice.

Capital One personal loan alternatives

A number of other lenders offer personal loans, which provide a lump sum of cash and feature predictable monthly payments and lower interest rates than credit cards (on average). Whether you apply at a bank, credit union, or online lender, the application process is typically easy, and you can often receive the funds within a few days.

Online loans

Many online-only lenders are financial technology companies (fintechs) that offer personal loans, student loans, and other types of loans but not other banking services like checking or savings accounts. SoFi and LendingClub are two examples of online lenders that are also considered banks, providing not only personal loans but also services such as checking accounts.

Online loans are suitable for many different types of borrowers — some even offer bad credit loans. For example, LightStream offers personal loans for purposes including debt consolidation and home improvement to people with good to excellent credit, while Upstart offers a similar array of personal loans but also considers college students and graduates with no credit history.

Bank loans

Banks are financial institutions that accept deposits, issue loans, and offer an array of financial services and products. Though Capital One doesn't offer personal loans, many banks do, including Discover, Citi, TD Bank, and Wells Fargo.

Most banks have physical branches, but some operate entirely online. Personal loans from banks offer some important benefits and drawbacks when compared to other types of lenders.

Credit union loans

Credit unions are member-owned, not-for-profit financial institutions that offer many of the same products as banks. A credit union may offer a range of loan products, including personal loans and payday alternative loans (PALs), as well as checking and savings accounts. You must be a member of a credit union to take out a loan. Membership at some credit unions is limited to people who work for specific employers or live in certain areas, but others may be open to virtually anyone.

Peer-to-peer loans

A peer-to-peer (P2P) lending platform is a marketplace that matches potential borrowers with lenders or investors. Like many online lenders, P2P platforms typically use technology to assess the risk of lending to a borrower. Some P2P loans are made by connecting borrowers directly with investors, while others are hybrid models that use financial institutions to originate the loans, which are then sold to investors.

Lending circles involve borrowers connecting with other borrowers to fund loans by pooling their money.

Types of personal loans

In addition to the range of lenders offering personal loans, there are different types of loans to consider.

Secured loans

Most personal loans are unsecured, but some lenders offer secured personal loans, which are backed by a valuable asset known as collateral to reduce the lender's risk. You give the lender permission to take the collateral — such as a vehicle or a home — if you fail to repay the loan.

Cosigned loans

Some lenders allow you to apply with a cosigner, which is someone you trust who has good credit and is willing to guarantee the loan if you fail to repay. Although online lenders that allow cosigners are rare, some offer joint personal loans with co-applicants. It's similar to having a cosigner, except the co-applicant or co-borrower also has access to the loan funds.

How to compare lenders

When comparing personal loan lenders, evaluate your options based on the following questions. It's easier to compare lenders if you prequalify first. Prequalification lets you see loan amounts, terms, and APRs you might qualify for without impacting your credit.

• What is the APR range (or the APR you prequalified for)?
• Does the lender charge an origination fee or any other fees?
• What repayment terms are available?
• What are the lender's credit score and income requirements?
• Does the lender offer the loan amount I need?
• Will the monthly payment be affordable?
• How quickly can the lender fund the loan?
• Can I apply with a cosigner or co-borrower?
• Does the lender offer secured loans?
• What is the lender's reputation on third-party customer review sites like Trustpilot?
• Does the lender offer convenient customer support?
• Does the lender offer digital tools like an online portal or mobile app?
• What discounts does the lender offer?
• Does the lender offer perks like financial education, credit monitoring, or other resources for borrowers?

Alternatives to personal loans

If a personal loan isn't the right fit for your needs, consider the following alternatives.

• Credit cards: Credit cards may be a good option for purchases you can pay off quickly. For example, Capital One offers several credit cards that come with a 15-month, 0% APR offer for new cardholders. Just remember that unpaid balances after the introductory APR period are subject to the card's regular APR.
• Home equity financing: You can borrow against the equity in your home by taking out a home equity loan or home equity line of credit. Home equity financing is a good option for homeowners who have plenty of equity and need a large loan with a long repayment term. But home equity loans come with upfront fees, take weeks or months to fund, and carry a risk of foreclosure if you fail to repay.
• Payday alternative loans (PALs I and PALs II): Many credit unions offer two loan products, known as PALs I and PALs II, that provide an affordable alternative to payday loans. Depending on the type of loan, you can borrow $200 to $1,000 with a repayment term between 1 and 6 months or up to $2,000 with a repayment term between 1 and 12 months. PALs may be available without a credit check.
• “Buy Now, Pay Later” loans: Buy now, pay later (BNPL) loans are a way to pay for purchases offered by some retailers and online payment services. BNPL providers typically offer an interest-free option that involves making four bi-weekly payments or a longer-term option that requires a hard credit check and works like an installment loan that you repay with interest. Personal loans are usually preferable if you're considering a longer-term BNPL plan.
• Cash advance apps: Cash advance apps offer a small advance on your earned wages that is automatically deducted from your next paycheck. They typically don't require a credit check. Relying on these apps may exacerbate your financial difficulties, especially if you pay to expedite funds or use an app that overdrafts your checking account. Fees and tips for cash advance apps can equate to triple-digit APRs. If you skip tipping and can wait for funds, cash apps may be an option for bad credit borrowers in an emergency.

How to apply for a personal loan

1. Check your finances: Check your credit score and add up your total income to determine which lenders you might be eligible for. (Lenders sometimes list minimum income and credit requirements in their FAQ, or publish them via personal loans marketplaces.) Evaluate your budget to determine the maximum monthly payment you can afford.
2. Research lenders: Find lenders you can qualify with that have a good reputation and offer the loan amount and repayment term you need.
3. Prequalify: Prequalify with a handful of lenders to estimate rates, amounts, and repayment terms you might qualify for.
4. Compare your options: Compare the APR and repayment terms of different options and choose the lender that best meets your needs.
5. Formally apply: Proceed with the application for the loan of your choice, answering any additional questions and uploading supporting documents that prove your income and identity.
6. Review and sign the loan agreement: Read and understand the terms of the agreement before e-signing your loan documents. Complete any additional forms to initiate the transfer to your bank account.