Where to Get a Personal Loan

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Point of Interest

A bank is not the only place you can get a personal loan. Loans are also available from credit unions and online lenders, sometimes with better rates and more favorable repayment terms.

Getting a personal loan can help when you need money fast or when you need to cover the costs of something important or unexpected. Once you’ve made the decision to get a personal loan, the next choice is where you’re going to get your loan from. Many people think that a bank is the only option. While a bank may be the right option, you actually have a few other places to go that could be a better fit or offer better interest rates and repayment terms.

Where to get a personal loan

When it comes to getting a personal loan, you have many different places where you can get one. By understanding your different options, you give yourself the ability to find the best lender, the best interest rates and the most favorable repayment terms. It can be tempting to jump at the first lender you see when you need fast cash, but taking a pause to educate yourself on the process will go a long way.

Bank

One of the first places most people look for a personal loan is a bank. Banks often offer loans to customers regardless of whether they are a current bank customer or not. Compared to some other options, the minimum credit score requirements to work with a bank may be a little higher, which could be a deterrent to some prospective borrowers with less-than-great credit. If you’re unsure if you’ll qualify, most banks offer a prequalification process that will give you a pretty good idea of your chances in a matter of minutes. There are also banks that offer bad credit loans, but these are almost always going to come with a very high interest rate.

Generally, banks service a much wider geographical area than credit unions. What this means for personal loan shoppers is you may be able to secure a loan with a bank even if there are no local branch locations. If you’re interested in shopping personal loans from banks, you can do that through the web, over the phone or by going into a local branch location. Keep in mind that not all major banks offer unsecured personal loans.

Credit Union

Personal loans are available from many credit unions just as they are from banks. There are some differences you need to be aware of, though. First, most credit unions only service a particular area or group of people. If you don’t fall into the coverage area, you might not be able to apply for a personal loan. Second, many credit unions require you to be a member before you can take advantage of products. This may be as easy as opening a checking account, but it is a necessary step.

Your options for applying for a personal loan from a credit union are on par with those you’ll get at a bank. Most credit unions offer phone support, online applications and service at a branch location. Some credit unions may be willing to work with customers with less-than-great credit, which could be positive for borrowers worried about approval. Your rate could be higher in that category, but you may have better odds of approval.

Online Lender

One of the more convenient ways to shop personal loans is through online lenders. Prospective borrowers can quickly get rate quotes through preapproval processes with soft credit pulls. Borrowers can also use online lending marketplaces where they can get several personal loan quotes within a matter of a few minutes by filling out one application. It’s a great place to start, especially if you have little idea about what you might be able to be approved for.

Additionally, many online lenders are known for working with borrowers with less-than-great credit. You may see caps on the amount you can borrow and higher interest rates, but it may be better than being denied for a loan altogether.

On the flip side, if you have good to great credit, you may be able to get a much better rate through an online lender. These companies have much lower overhead costs, which gives them the ability to pass on the savings to you.

The one drawback with online lenders is you won’t be able to go into a branch location to speak with a loan officer or customer service representative if you’re looking for a personal touch. All help is done through the web or over the phone.

How to choose the right personal loan provider

When it comes to deciding on what lender to use for your personal loan, it’s all about choosing the option most fitting for your needs. While it can be tempting to look at only the interest rate, you should be looking at several different factors. The most important factors to look at include the repayment terms, the reputation of the lender, any associated fees or additional costs and, of course, the interest rate.

Additionally, you need to pay attention to the eligibility requirements of the lender, as well as the total amount the lender is willing to approve you for. If you don’t qualify for a loan or the lender won’t give you enough for your specific need, it’s not a viable option.

Take some time and select a handful of lenders that look like good potential options. From there, go through the preapproval process and see what you might be able to get approval for. Once you’ve done this, select the best option for you and complete the full application. Additionally, it’s okay to shop personal loan lenders from two or all three of the provider options covered above. As long as you’re only using the preapproval processes before making a final decision, there is no downside to shopping for several options.