Where to Get a Personal Loan

You can get a personal loan from an online lender, credit union or bank. Your interest rate and loan terms will depend on where you get the loan as well as your financial and credit information.

Each type of lender has its own benefits:

• Online lenders: These lenders offer a convenient way to find and compare personal loans online.

• Credit unions: Personal loans from credit unions may have lower annual percentage rates and flexible terms for their members.

• Banks: Some national banks offer personal loans with competitive rates and in-person support.

The best place to get a personal loan depends on where you can get the best interest rate plus the loan term and features that you need.

» MORE: Best personal loans

Personal loans from online lenders

Online lenders typically offer the fastest way to get a personal loan, with some loans approved and funded within a day or two.

Most online lenders also let you pre-qualify to preview your potential rate and term before formally applying. Lenders perform a soft credit check to pre-qualify you, so you can compare offers from multiple lenders without impacting your credit.

Some online lenders target good- or excellent-credit borrowers (those with credit scores of 690 and above) by offering high loan amounts and low interest rates. Others cater to fair- or bad-credit borrowers (credit scores below 690). Bad-credit loan rates are higher, but a lender may consider factors beyond your score, such as education or employment.

» MORE: What credit score do you need for a personal loan?

Pros

• Pre-qualify before committing to a loan: Most online lenders conduct a soft credit check, which allows borrowers to see rates and terms before committing to a loan.

• Convenient and fast application process: Borrowers who are comfortable getting a loan online can pre-qualify and apply online and may receive funds within a couple days of approval.

Cons

• Potentially higher APRs: Bad- and fair-credit borrowers may receive a high rate from an online lender.

• No in-person support: Most online lenders have customer service representatives you can call, but few have physical branches you can visit when you need help.

» MORE: What are the requirements for a personal loan

Personal loans from credit unions

Credit unions may have softer requirements and offer lower interest rates to borrowers with fair and bad credit. To apply for a loan, you must become a member first, which typically requires a small fee.

Credit unions may also provide small personal loans of less than $2,500.

First Tech Federal and Alliant Credit Union are two credit unions that offer personal loans starting at $500 and $1,000, respectively.

Pros

• Low APRs for fair- and bad-credit borrowers: Federally chartered credit unions cap APRs at 18%, so borrowers with imperfect credit may receive lower rates than they would elsewhere.

• Softer eligibility requirements: Many credit unions consider your history as a member during the loan application process, which can help your chances of approval.

Cons

• Membership required: You have to meet membership eligibility requirements to apply for a credit union loan.

Personal loans from banks

You’ll likely need good credit to qualify for a personal loan from a bank. It also helps to already have an account with the bank.

Existing customers may get lower rates, higher loan amounts and be allowed to apply online, while new customers may need to visit a bank branch.

PNC and Wells Fargo are examples of large banks that offer personal loans to borrowers in all 50 states. However, not all banks offer personal loans.

» MORE: Top banks offering personal loans

Pros

• In-person support: Borrowers can visit a physical branch for more personalized help from a loan officer.

• Low APRs: Of all the types of lenders, banks typically offer the lowest personal loan rates.

Cons

• A branch visit may be required: Some banks require you to complete the application process in person.

• May need to be an existing customer: You may need to already have an account with a bank lender to apply for a personal loan or to get the largest loan amount and lowest rates.

Summary of pros and cons of personal loan lenders

How to choose a lender

When shopping for a personal loan, look beyond the interest rate and monthly payment to consider the annual percentage rate. The APR includes the interest rate and any extra fees. It’s the best apples-to-apples cost comparison between two loans.

Also consider the loan term, which impacts your monthly payment. Typical terms are two to seven years; a longer loan term means lower monthly payments, but more total interest.

Finally, compare consumer-friendly features from different lenders. For example, with some debt consolidation loans, lenders will send money directly to creditors, eliminating that step for you. Other lenders may let you pick a payment due date or skip a payment.