Banks that offer personal loans
Most banks offer personal loans, but the terms, rates, and approval process vary widely. The largest national banks—Chase, Bank of America, Wells Fargo, Citibank, and US Bank—all have personal loan products. Regional banks and credit unions often have different requirements and may offer better rates to their existing customers. Online lenders like LendingClub, Upstart, and SoFi also issue personal loans, sometimes with faster approval than traditional banks.
The bank you can borrow from depends on whether you already have an account there, your credit score, your income, and how much you want to borrow. A bank that turns you down may not be the only option—credit unions, online lenders, and smaller regional banks have different lending standards. Some specialize in borrowers with lower credit scores or shorter credit histories.
Key Takeaways
- National banks like Chase and Bank of America offer personal loans, but credit unions and online lenders often have lower rates and different approval standards.
- Your credit score, income, and existing relationship with a bank all affect whether you can borrow and what rate you will pay.
- Loan amounts typically range from $1,000 to $50,000, though some lenders go higher or lower depending on your situation.
- Approval timelines vary: traditional banks may take one to two weeks, while online lenders can fund within days.
- Comparing offers from at least three lenders before you borrow helps you understand the real cost of the loan.
How banks decide whether to lend to you
Banks use your credit score, income, debt-to-income ratio, and employment history to decide whether to lend. A credit score of 620 or higher opens doors at most traditional banks; scores below that narrow your options but do not close them entirely. Online lenders and credit unions sometimes work with scores in the 580–620 range.
Your debt-to-income ratio—the percentage of your monthly income that goes to existing debt payments—matters as much as your score. If you already owe $2,000 a month and earn $5,000, a bank may decline a loan that would push that ratio above 43 percent. Income verification usually means recent pay stubs or tax returns; self-employed borrowers often need two years of tax returns.
Banks also check whether you have an existing account with them. Existing customers often get better rates and faster approval because the bank already knows your account history. A new customer with the same credit score and income may face a higher rate or stricter terms.
Loan amounts, rates, and repayment terms
Personal loan amounts typically range from $1,000 to $50,000, though some online lenders go up to $100,000 and some credit unions cap at $25,000. The amount you can borrow depends on your income and credit score. A borrower with a 750 credit score and $80,000 annual income may borrow $35,000; someone with a 620 score and the same income might max out at $10,000.
Interest rates vary by lender and your creditworthiness. National banks typically charge 8 to 18 percent for borrowers with good credit; online lenders range from 6 to 36 percent depending on risk. Credit unions often undercut both, sometimes offering rates as low as 6 to 12 percent to members. Rates also depend on the loan term—a three-year loan costs more in interest than a five-year loan, but your monthly payment is higher.
Repayment terms usually run from two to seven years. Shorter terms mean higher monthly payments but less total interest paid. Longer terms lower your monthly payment but increase the total cost of borrowing.
Traditional banks versus credit unions versus online lenders
| Type | Typical Rate Range | Approval Timeline | Loan Amounts | Best For |
|---|---|---|---|---|
| National banks (Chase, Bank of America, Wells Fargo) | 8–18% | 1–2 weeks | $1,000–$50,000 | Existing customers with good credit |
| Credit unions | 6–12% | 3–7 days | $500–$50,000 | Members; often better rates than banks |
| Online lenders (LendingClub, Upstart, SoFi) | 6–36% | 1–3 days | $1,000–$100,000 | Speed; borrowers with lower credit scores |
| Regional and community banks | 7–16% | 5–10 days | $1,000–$35,000 | Local relationships; personalized service |
Traditional banks offer stability and lower rates for borrowers with strong credit, but approval takes longer and requirements are stricter. Credit unions charge less interest and approve faster, but you must be a member—membership often requires living or working in a specific area or belonging to a particular employer or organization. Online lenders fund fastest and work with a wider range of credit scores, but rates can be high and terms less flexible.
What to do if a bank turns you down
A rejection from one lender does not mean you cannot borrow. Different banks have different standards. A bank that declines you because your debt-to-income ratio is too high might approve you at a credit union with looser requirements. An online lender that specializes in lower credit scores may offer a rate when a traditional bank will not.
Before you apply elsewhere, understand why you were turned down. Banks must provide a reason under the Fair Credit Reporting Act—usually it is credit score, income, or debt-to-income ratio. If the reason is a credit report error, dispute it with the credit bureau before applying again. If it is income, waiting a few months or paying down existing debt may help your next application.
Avoid applying to many lenders in a short time. Each application triggers a hard inquiry on your credit report, and multiple inquiries in a few weeks can lower your score slightly. Space applications out by at least a week, and focus on lenders most likely to approve you based on your situation.
How to compare offers before you borrow
When you receive loan offers, compare the annual percentage rate (APR), not just the interest rate. APR includes the interest rate plus fees, so it shows the true cost of borrowing. A loan with a 10 percent interest rate and a $500 origination fee has a higher APR than one with a 10.5 percent rate and no fees.
Calculate the total amount you will pay over the life of the loan. A $10,000 loan at 12 percent over three years costs about $1,977 in interest; the same loan over five years costs about $3,318. The monthly payment is lower with the longer term, but you pay significantly more overall. Use a loan calculator to see the difference.
Check whether the loan has prepayment penalties. Some lenders charge a fee if you pay off the loan early; others do not. If you think you might pay early, a loan without penalties saves money. Also confirm whether the rate is fixed or variable—fixed rates stay the same for the life of the loan, while variable rates can change, making your payment unpredictable.
Steps to take before you apply
Check your credit report at annualcreditreport.com, which is free and does not affect your score. Look for errors—wrong account information, accounts you did not open, or incorrect payment history. Dispute any errors with the credit bureau before you apply for a loan.
Gather documents you will need: recent pay stubs, tax returns (usually the last two years), proof of income if self-employed, and a list of your current debts with monthly payments. Having these ready speeds up the application and shows lenders you are organized.
Decide how much you need and what you can afford to pay monthly. Borrowing more than necessary costs more in interest. A monthly payment calculator helps you understand what different loan amounts and terms will cost.
Frequently Asked Questions
What credit score do I need to get a personal loan?
Most traditional banks want a score of 620 or higher. Credit unions often work with scores as low as 580. Online lenders have the widest range and may lend to borrowers with scores below 580, though rates will be higher. Your score is one factor—income and debt-to-income ratio matter too.
Can I get a personal loan if I am self-employed?
Yes, but you will need to provide two years of tax returns and possibly profit-and-loss statements to prove your income. Some lenders are stricter with self-employed borrowers because income can be variable. Online lenders and credit unions sometimes have more flexible requirements than traditional banks.
How long does it take to get the money after approval?
Online lenders typically fund within one to three business days. Traditional banks usually take five to ten business days. Credit unions often fall in between at three to seven days. Once the money is in your account, you can use it immediately.
What happens if I miss a payment?
Most lenders allow a grace period of 10 to 15 days before reporting a missed payment to credit bureaus. After that, late fees apply and your credit score drops. If you miss multiple payments, the lender may accelerate the loan—demand full repayment immediately—or pursue collection. Contact your lender immediately if you cannot make a payment.
Is it better to borrow from my bank or shop around?
Shopping around almost always saves money. Even if your bank offers a competitive rate, comparing three to five offers shows you the real range of what is available. The difference between a 10 percent rate and a 14 percent rate on a $15,000 loan is hundreds of dollars over the life of the loan.