Banks that offer personal loans
Most banks offer personal loans, but the ones available to you depend on where you bank and what your credit looks like. The largest banks—Chase, Bank of America, Wells Fargo, Citibank—all have personal loan products. Regional banks and credit unions often do too, though their terms and rates vary widely. Online banks like LendingClub, Upstart, and SoFi have become major players and sometimes offer faster approval than traditional banks.
The catch is that banks set their own requirements. A bank might offer personal loans to customers with a credit score of 620 or higher, while another requires 700. Some banks only lend to existing customers; others will lend to anyone who meets their criteria. Rates range from around 6% to 36% depending on your credit, income, and the lender's own pricing.
You do not have to use your current bank. You can shop around, apply to multiple lenders, and compare what each one offers before you commit. Most lenders will give you a rate estimate without a hard credit pull, which means checking won't hurt your score.
Key Takeaways
- Major banks like Chase and Bank of America offer personal loans, as do credit unions and online lenders, but each has different credit score requirements and rates.
- Your current bank may offer better terms to existing customers, but you can borrow from any lender that meets your needs.
- Interest rates for personal loans range from roughly 6% to 36% and depend on your credit score, income, and debt-to-income ratio.
- You can request a rate estimate from multiple lenders without damaging your credit score, which helps you compare before you decide.
- Online lenders often approve and fund loans faster than traditional banks, sometimes within one to three business days.
How banks decide whether to lend to you
Banks look at three main things: your credit score, your income, and how much debt you already carry. Your credit score tells them whether you have paid past debts on time. Your income shows them you can afford the monthly payment. Your debt-to-income ratio—the percentage of your monthly income that goes to debt payments—tells them whether you have room in your budget for a new loan.
Most banks will pull your credit report, which is a hard inquiry and temporarily lowers your score by a few points. This is normal and expected. If you apply to multiple lenders within a short window (usually two weeks), the inquiries count as one hit to your score, so do your shopping quickly if you plan to apply to several places.
Some lenders also verify your income by asking for recent pay stubs or tax returns. A few online lenders use alternative data—like your banking history or utility payments—if you have thin credit or no credit history at all.
Comparing rates and terms across banks
Personal loan rates and terms vary so much that the difference between one bank and another can cost you hundreds or thousands of dollars over the life of the loan. A $10,000 loan at 8% costs less in interest than the same loan at 15%, even if the term is the same.
When you compare, look at the annual percentage rate (APR), not just the interest rate. The APR includes fees and gives you the true cost of borrowing. Also check the loan term—how long you have to repay. A longer term means a lower monthly payment but more interest paid overall. A shorter term costs less in interest but has a higher monthly payment.
Most banks let you see your rate estimate online without applying. Use that to compare at least three lenders before you decide. Pay attention to whether the bank charges an origination fee (a one-time cost taken from your loan) or a prepayment penalty (a fee if you pay off early).
Timeline from application to funding
Traditional banks usually take five to seven business days from application to funding. You submit your application, they verify your income and pull your credit, they make a decision, and then they send the money to your bank account. Some banks are slower; some are faster.
Online lenders are often quicker. Many can approve you the same day you apply and fund within one to three business days. A few will fund the next business day if you apply early in the day and everything checks out.
Credit unions fall somewhere in the middle—usually three to five business days. The exact timeline depends on how busy they are and whether they need to verify anything about your application.
What you need to have ready before you apply
Have your Social Security number, a recent pay stub, and a recent tax return or bank statement ready. Most lenders ask for at least two of these to verify your income. If you are self-employed, have your last two years of tax returns available.
You will also need to know your current debts—credit cards, car loans, student loans, anything with a monthly payment. Lenders calculate your debt-to-income ratio from this information. Have the account numbers and monthly payment amounts handy.
Some lenders ask for your employment history for the past two years. If you changed jobs recently, have the dates and your employer contact information ready. A few lenders also ask for references, though this is less common.
Personal loans from your current bank versus shopping around
Your current bank knows your account history and may offer you a better rate than you would get elsewhere, especially if you have been a customer for years and have a good account history. Some banks give existing customers a small rate discount. It is worth asking.
That said, your current bank is not always the cheapest option. A credit union or online lender might offer a lower rate even if you have never done business with them before. The only way to know is to get rate estimates from at least two or three places.
If your current bank turns you down, that does not mean you cannot get a personal loan elsewhere. Different lenders have different standards. One bank might decline you because your credit score is too low, while another lender specializes in borrowers with lower scores and will work with you.
What happens if a bank denies your application
If a bank denies you, they are required to tell you why—usually because your credit score is too low, your income is too low, or your debt-to-income ratio is too high. Read the denial letter carefully; it will say which factor caused the problem.
You can try other lenders. Online lenders and credit unions sometimes have lower credit score requirements than traditional banks. If your score is the issue, you might wait a few months, pay down some debt, and apply again. Each month of on-time payments helps your score.
If your income is the problem, adding a co-signer—someone who agrees to repay the loan if you cannot—can help you get approved. The co-signer's income and credit are considered alongside yours.
Frequently Asked Questions
Do I have to use my bank for a personal loan?
No. You can borrow from any bank, credit union, or online lender that will lend to you. Your current bank may offer a small rate discount to existing customers, but you should compare offers from at least two or three lenders before you decide.
What is the difference between a personal loan and a credit card?
A personal loan gives you a lump sum upfront and you repay it in fixed monthly payments over a set period, usually two to seven years. A credit card is a revolving line of credit—you can borrow, repay, and borrow again. Personal loans typically have lower interest rates than credit cards.
Can I get a personal loan with bad credit?
Yes, but you will pay a higher interest rate. Online lenders and credit unions often work with borrowers who have credit scores below 620. Some specialize in bad credit loans. Expect rates between 25% and 36% if your score is very low.
How long does it take to get approved for a personal loan?
Online lenders can approve you in hours or the same day. Traditional banks usually take one to three business days to make a decision. Funding—when the money actually reaches your account—typically takes one to seven business days depending on the lender.
What if I want to pay off my personal loan early?
Most banks allow early repayment without penalty, but some charge a prepayment fee. Check the loan agreement before you sign. If early payoff is important to you, choose a lender that does not charge a penalty.