Find the Best Personal Loan for Your Needs
When most people think of borrowing money, they typically think of a bank. Banks are the primary hotspot for money lending in the United States. They provide a lot of the liquidity that we see in the market. But non-traditional lenders have emerged to provide competition to these traditional banks.
If you’re thinking that you want to opt for a traditional bank loan for your personal loan, you probably want some more information to better understand if you’re making the right choice. Staying informed regarding the types of finance that you’re considering obtaining is the best way to make sure that you choose the right option.
This guide is a comprehensive explanation of personal bank loans and their associated benefits. It will also discuss the drawbacks associated with this form of loan, as well as the potential ramifications of obtaining one. Make sure to read through the entire article before you decide to proceed with any additional research – it is sure to answer any questions you may currently have about this lending product.
What Are Personal Bank Loans For?
Personal banks loans are simply personal loans that are distributed by banks. They provide their borrowers with capital they need for a variety of different costs. The difference between a personal bank loan and other forms of personal loans really comes down to the source. You can get personal loans from a variety of different lenders, but the general concept of the loan is pretty much the same.
We will explore personal banks loans and what they can do for you and your family in more detail below.
If you need to purchase a car or other essential item that you cannot afford to pay for upfront, personal bank loans are typically the type of loan that you will aim to acquire. You should make sure that you need the item that you are purchasing, we do not advise that you get into debt by buying things that you don’t need.
If you’re studying, you might find that personal bank loans provide you with capital at a lower interest rate than some student loans. In this case, you can take advantage of a personal loan to help cover some of the costs associated with being a full or part-time student. Always make sure to compare student loan rates with other forms of finance available to you.
This can be valid for both homes and cars. There will come a time when you have to make some repairs on something that you own. This could come at an unexpected time that results in you not being able to afford fixing things you need to fix. If there is something that needs urgent repair, don’t let it go untouched – you can often find a personal bank loan that will be able to improve your situation.
Medical expenses in the United States are extremely high, it’s important that you fully understand the total amount of money that you may have to pay if something is to happen. This is especially true for people who might not have medical insurance. Personal loans can help people pay medical costs that they otherwise might not be able to afford. It is important to note that some hospitals will have interest-free payment plans you can sign up for, if this is the case it will most likely be cheaper than a personal bank loan!
Secured Vs. Unsecured
There are two types of personal bank loans that you can get: secured and unsecured. These loans differ and have their own benefits and drawbacks. Secured loans are loans that are tied to an asset that you own. For example, you might secure a loan with a property that you own. If you end up missing payments or defaulting on the loan, the bank can come and claim your asset to help settle the outstanding debt that you have. For this reason, secured loans are considered much riskier for borrowers – you have to put other assets at risk to obtain this form of finance.
Unsecured loans on the other hand don’t have these associated risks. You don’t have to put up any collateral to obtain the loan. As you may be able to tell, these types of loans are much riskier for the lender, which means that you won’t get one of these loans as easily as you might get a secured one. They also tend to have much higher interest rates than secured loans. Signature loans are also unsecured.
Banks are much more likely to offer secured loans when compared to other non-traditional lenders. If you’re looking to get a secured personal loan, a bank loan is typically the best option you have. They will have much more flexibility when it comes to providing these types of loans. They will typically also have more flexibility when it comes to the types of assets you can use to secure the loan. Traditional lenders have many more resources when compared to smaller lenders.
Another way to help reduce your interest rates and increase your chances of getting personal bank loans is to co-sign the loan. Co-signers are individuals who offer up their signature to allow you to get a loan. This person is guaranteeing the loan – they will have to pay anything back that you are unable to. Their credit score is at risk if you don’t act responsible. For this reason, we highly recommend that you don’t use this form of loan unless you are certain you will be able to pay back what you owe. It’s unfair to put someone else’s financial future at risk for your own gain.
Advantages of Personal Bank Loans
As you can see, there are plenty of reasons people might want personal bank loans. But it can be hard to take in such a considerable amount of information at once. That’s why it’s sometimes best to look at things from a bird’s-eye-view. We’ve compiled a list of the top advantages of personal bank loans so you can have a look at it.
- Personal – At the end of the day, the primary advantage of using a traditional lender is the fact that you have a much more personalized experience. You get to speak with a lender face-to-face about what you’re looking to get out of your lending decision. They will be able to consult you on your best options, and may even recommend a different form of finance that is more suitable to you.
- Large Institutions – Traditional banks are typically the largest lenders in the country. They account for a significant portion of the money lent both commercially and to consumers. If you want to work with a bank that has a large presence in the industry, traditional banks are typically your best option.
- Highly Regulated – Traditional banks are the most regulated lenders in the United States. As consumer banks, they have to abide by strict rules put in place by federal regulatory bodies. If you’re looking to work with a lender that you know has to abide by certain rules, traditional bankers are often the best.
- Attached to Your Banker – Another great benefit is that you can often get a loan through your current banker. This means that you don’t have to work with a separate company to get the money that you want. It can make paying your payments much easier. Although it must be said that modern lenders have made it much easier to use different banks and loan providers in recent times.
Disadvantages of Personal Bank Loans
And while there are many advantages to getting a personal bank loan, there are also some drawbacks. It’s important to be aware of the negative aspects of personal bank loans. You don’t want to end up being unaware of potential issues you may face.
- Harder to Get – At the end of the day, traditional lenders prefer to work with people that have higher credit scores. If you’ve had problems getting finance in the past, you’ll probably struggle to get a personal bank loan and will instead need to look for loans for bad credit from alternative lenders.
- Longer Application – The application process for personal bank loans is also a bit longer than with some other lenders. You might have to bring in extensive documentation depending on the lender that you decide to work with.
- Longer Decision Process – Another drawback is that sometimes lenders will take days or weeks to approve a decision with personal bank loans. This is a huge problem for someone who might need money quickly.
The Transition Online
The banking industry has seen a lot of competition arising from the technological sector. There are now online lenders that have no physical presence whatsoever that can sometimes offer instant online loans. These lenders are becoming increasingly popular with borrowers in the United States. Banks have recognized this threat and began to offer their own online services.
You’ll find that many traditional banks in the United States will now allow you to fill in an online application for personal bank loans. This can be a great way to receive some of the benefits that traditional lenders offer, without having to expose yourself to some of the drawbacks. Have a look at different traditional lenders with online presences if you do feel you want to apply for a personal bank loan.
Alternatives to Personal Bank Loans
If you’ve read through this guide and decided that you don’t want apply for personal bank loans, you’re probably wondering what your other options are. Fortunately, there are plenty of options available to you in the 21st Century. You can opt to work with online lenders that will provide you with a much quicker application process. On the other hand, these lenders won’t have the same customer service approach that many traditional personal bank loans have.
You can also look at completely different forms of finance. If you’re planning on paying off your debt extremely quickly, you could even opt for a credit card or other form of revolving credit. No matter what you do, avoid payday loans at all costs. These may seem like solid alternatives to get fast cash, but they can have seriously bad effects on your financial health. Payday loan companies often charge up to 1000% interest on loans that they offer to you. If you miss a payment, you could end up in a mountain of debt that you will never be able to escape.
Make sure that you are fully aware of any alternative financing you may be looking to get involved with. As mentioned previously, you should never approach a financial decision without being an expert on the type of agreement that you’re entering.
Personal banks loans continue to be one of the most popular forms of borrowing for several reasons. They provide consumers with access to capital and the opportunity to work with reputable, large lenders who have a firm understanding of the lending market. They’re a great opportunity to prove that you can be a responsible borrower. If you pay off your personal bank loan without any hiccups, it will do wonders for your credit score and help you build your financial future.
But choosing the right lender is often the hardest part of the entire personal bank loan process. You want to make sure that you work with someone who has a longstanding reputation for customer satisfaction – anything short of this should be a red flag. We’ve researched and compiled a list of the top lenders to work with. We want our readers to have a head start when it comes to choosing a lender to borrow from. Make sure to check out our homepage for more information.
Don’t hesitate to ask your lender as many questions as possible. It’s important that you fully understand the contract your signing. If you find anything confusing, talk to a customer service representative before you sign on the dotted line. Remember, there are tons of different lenders that you can choose from, there’s no real reason to sign up for something that you’re not comfortable with.
Know more about getting a personal loan from banks as well as bank loans in general and other related topics through this FAQ.
General Information on Personal Bank Loans
This section would consist mostly of clearing out definitions as well as recommending banks based on existing reviews and information.
What is a bank loan?
What is an unsecured bank loan?
An unsecured bank loan is simply a loan from a bank that you can get without putting up a collateral that you may lose if you default. Be wary of lenders offering unsecured personal loans guaranteed approval especially if they are not a well known bank.
Which banks offer personal loans?
Smaller banks and regional banks still offer them, but most big US banks have terminated that service. Citibank personal loans can be a good option.
Which banks offer secured loans?
Which banks use Experian for loans?
The Bank of America and Citibank primarily uses Experian for new credit accounts. However, they usually pull reports from the other two credit reporting agencies as well. If you're worried that your score will disqualify you then you can check out fast loans bad credit options from alternative lenders.
What is the best personal loan?
Where is the best place to get a personal loan?
Which is the best bank for personal loan?
In most reviews of the best personal loans, traditional banks are outshined by online and alternative lenders. However, Wells Fargo is able to place in some of them. Capital One loans have been reviewed well too.
Is a personal loan a good idea?
Are credit unions better than banks for loans?
Qualifying and Getting a Personal Bank Loan
In this section, you’d get information on applying for personal bank loans and whether you’d qualify for one.
How do I apply for a bank loan?
First, identify the type of loan you wish to apply for. Then, inquire at your bank about the requirements, and if you meet their minimum requirements, submit all the necessary documentation. If your score is low then apply for a loan with bad credit at an alternative lender.
How do I get a personal loan from a bank?
You would need a good to excellent credit score. Aside from that, they may also ask for other things such as proof of income. You may also qualify for the best personal line of credit rates.
How can I get a small personal loan?
Some banks lend a minimum of $5,000 for personal loans, so before anything else, make sure that your lender of choice is willing to grant the amount you need. Then, simply go through the application process. There are other alternive lenders willing to give you small loans for poor credit too if that's the range you are in.
How do bank loans work?
How long does it take to get a personal loan from a bank?
How long does it take to get a loan approved?
It depends on the type of loan and where you’re going to get it. For example, payday loans can be granted within the same day, but home equity loans will take longer as the property itself will still be examined. Look at loans no credit check options if you're lacking in that department.
How do I get a bank loan with bad credit?
You may not be able to. However, you may opt for secured personal loans and other secured loan products. However, depending on why you need the loan, there may be other programs or options outside of bank loans. For example there may be medical financing bad credit options to pay your medical bills.
How do I get a bank loan with no credit?
Your only choice would be the bank you already have a bank account with. However, even there, your odds aren’t so great. For example a US Bank personal loan may require that you already have a history with the bank.
How do I get a bank loan without collateral?
Opt for bank loans that normally don’t require a collateral like personal loans. Of course, an excellent credit score would only raise your profile to your creditors. There's also peer to peer options you can look at. Check out our peer to peer lending review.
Can I get a personal loan from a bank?
Of course, you always have the freedom to apply for one. However, your approval will depend on your creditworthiness, among other things. Some allow you to borrow money online instantly.
Can I get a personal loan from any bank?
No. While the requirements banks have for personal loans are generally tougher, they’re not uniform. So, it’s possible for you to get a loan from one but not the other. For example, take a look at requirements for TD Bank loans.
Can you get a personal loan with a credit score of 550?
Yes, but not from banks. You’d want to go to alternative lenders which cater to borrowers with bad credit. For example, you could look at installment loans bad credit options.
Is it hard to get a personal loan from a credit union?
Compared to banks, it’s easy to get a personal loan from a credit union. However, as getting a loan there would require membership, it may be hard or even impossible for you to even apply for one. And if you score is lower you may want to look at alternative lenders for personal loans fair credit options.
Can you get 2 loans from the same bank?
Definitely. In fact, assuming that you pay on time, that can help raise your profile to the bank. Some people will have loan for a car and for home improvement or pool from the same bank for example. Read more: Can you finance a pool?
What is needed to qualify for a personal loan?
As most personal loans are unsecured, you would need an credit score of at least 700 if you’re applying for one at a bank. Alternative lenders are more lenient though in terms of credit rating requirements as they’d look at other factors to determine your creditworthiness. This still doesn't mean its a guaranteed loan approval, so look at all the requirements first.
How do I qualify for a bank loan?
You would need a strong profile, especially in terms of credit rating, length of credit history, as well as income. However, with secured loans, they won’t be as strict. Read more about how to get a personal loan with bad credit.
What age can you get a bank loan?
Can you get multiple loans from different banks?
Yes. For as long as you are approved for the loans, you can get them. For example I've gotten both Wells Fargo and Bank of America personal loans at the same time before.
Do I need a bank account to get a loan?
How many bank loans can you have at once?
Personal Loans from Different Banks
Here, your queries about personal loan products of different banks are discussed.
Does Bank of America do personal loans?
Does Chase bank do personal loans?
How do I get a cash loan from Bank of America?
Loan Amount and Interest Concerns
Know how your loan amount and your interest payments are determined through the questions below:
How much will a bank loan me?
How much interest do banks charge on personal loans?
How do banks calculate interest rates on loans?
Banks are not transparent on how they determine your interest rate. But more than your personal profile, banks look at existing market rates. See if they have an unsecured personal loans calculator to help you with your loan decision.
How do I calculate my bank loan repayment?
How do I calculate my bank loan interest in Excel?
Use the PMT function where:
rate is the interest rate per repayment period. For example, if you pay per month, it will be the APR divided by 12.
Nper is the total number of repayments for the life of the loan.
Pv is the loan amount.
Can you extend a bank loan?
With definitions, rates, and availability of personal loans covered already, you may still have some queries about the process which you still need answers for. Those that did not fit into the categories created are below:
Can a bank deny a loan after closing?
Do banks call your employer for personal loans?
Is it better to pay a loan off early?
Can I use CPF to pay a bank loan?
Christine has a solid background in personal finance as she spent the last eight years working at one of the biggest banks in the US. She managed her own team of financial advisors that helped hundreds of people with their financing needs. Her innate understanding of different financial products and loans helped her move up the ranks quickly after graduating with a degree in Business Administration.