What Banks Offer Personal Loans? The Straight-Talk Comparison

Not every bank offers personal loans, and the ones that do don’t play by the same rules. This straight-talk guide explains which banks actually lend, how they stack up against credit unions and online lenders, and the factors that really change your cost: APR vs. fees, term length, funding speed, and relationship discounts. In a few minutes, you’ll know where to look first (include a credit union), how to prequalify with a soft credit check, and which red flags to avoid. If you’re torn between your everyday bank and a fast online option, start here.

No fluff, just what matters so you can choose fast and confidently.

TL;DR

• Who offers them? Big national banks, regional/community banks, credit unions, and online banks/fintechs.
• Biggest mistake? Comparing only the rate and ignoring fees, terms, funding speed, and prequalification.
• Best first move? Use soft-pull prequalification with 3–5 lenders, including a credit union, to compare real offers without hurting your credit.

What counts as a “bank” here?

• Traditional banks: national, regional, and community institutions with branches.
• Credit unions: member-owned “bank-like” institutions (often lower costs).
• Online banks/fintech lenders: branch-free, application and servicing online; some are bank subsidiaries or partner with banks.

Not every institution offers personal loans, and many only lend to existing customers or specific states/regions.

Quick Comparison: Where Each Type Shines

Provider type	When it’s often best	What they’re great at	Watch-outs
Big national banks	You already bank there and want one-stop service	Relationship pricing, robust apps, autopay discounts	May be stricter on credit & DTI; slower funding; more fees
Regional/community banks	You prefer local service & in-person help	Flexibility, personal underwriting, negotiating fees	Limited online tools; geographic restrictions
Credit unions	You want low costs and fair terms	Competitive rates, member-friendly policies	Membership required; fewer bells & whistles
Online banks/fintechs	You need fast funding and easy prequalification	Same-day/next-day funding, transparent online offers	Wider fee/term variability; aggressive upsells with some players

How to Compare Offers (the no-nonsense checklist)

1. APR, not just rate: APR includes interest and fees—this is your apples-to-apples number.
2. Fees: Origination, late, and prepayment. (Prepayment penalties are rare—avoid them.)
3. Loan amounts & terms: Make sure the payment fits your budget at the shortest term you can afford.
4. Funding speed: Need the cash this week? Online lenders typically win here.
5. Soft-pull prequalification: Verify the lender uses a soft credit check until you accept an offer.
6. Discounts: Autopay or customer-relationship discounts can trim the APR.
7. Flexibility: Options like skipping a payment once a year, due-date changes, or hardship support.
8. Co-applicant/co-signer support: Can lower your APR if your file is thin or credit is average.
9. Customer experience: Read real reviews on servicing (not just approvals).
10. Total cost of borrowing: Payment × number of months + fees—keep your eye on the lifetime cost.

Who Typically Qualifies (and what lenders look for)

• Credit score: Higher is better, but credit unions and community banks may look beyond the score.
• Debt-to-income (DTI): Many lenders target DTI ≤ 40–45% (including the new loan).
• Income & stability: Consistent W-2 or verifiable self-employment income helps.
• Employment & residency: Time on job/address can matter for traditional banks.
• Collateral: Most personal loans are unsecured. Some banks offer secured options (using a CD/savings).

Application Prep: What to Have Ready

• Government ID, Social Security/Tax ID (country equivalent), proof of income (pay stubs, W-2/return), employer contact, monthly housing cost, and your bank info for funding.
• If using a co-applicant, gather their documents too.

Strategies to Get a Better Offer

• Improve your DTI: Pay down a revolving balance before applying.
• Check for errors on your credit report and dispute them in advance.
• Add a co-borrower with stronger credit/income.
• Ask for relationship discounts at the bank where you keep your checking/savings.
• Right-size the term: Shorter term = lower total interest (if the payment is comfortable).

Banks vs. Credit Unions vs. Online Lenders (Deeper Dive)

Traditional Banks

• Pros: Relationship perks, in-branch support, bundled banking.
• Cons: Can be slower to fund; some require strong credit or existing accounts; occasional origination fees.

Credit Unions

• Pros: Member-centric pricing, flexible underwriting, fewer junk fees.
• Cons: Must qualify for membership (often easy: employer, school, region, or joining a partner organization).

Online Banks/Fintechs

• Pros: Fast, digital process; easy prequalification; clear comparisons.
• Cons: Quality varies; read fee disclosures carefully; ensure there’s real customer support.

Red Flags (Say “no thanks” if you see these)

• No APR shown pre-application, or “teaser” rates that vanish at checkout.
• Hard credit pull before you even see a range of terms.
• Prepayment penalties or mandatory add-ons (credit insurance, memberships).
• Unclear origination fees or sky-high late fees.
• Pressure tactics (“offer expires in 60 minutes!”).

Secured vs. Unsecured Personal Loans

• Unsecured: Most common; based on credit/income; no collateral.
• Secured: Backed by savings/CD or vehicle; can lower APR if your credit is rebuilding—but you risk the collateral.

Alternatives to Consider

• 0% intro APR credit cards (for small, short-term needs).
• HELOC/home equity loans (if you’re a homeowner and can accept collateral risk).
• In-house financing for medical/dental/education—sometimes cheaper.
• Debt consolidation programs—look for nonprofit counseling if you’re overwhelmed.

Step-by-Step: Your Comparison Game Plan (30–60 minutes)

1. List 4 providers: your primary bank, a local credit union, and 2 reputable online lenders.
2. Prequalify (soft pull): Capture APR, term, payment, fees, funding speed, and discounts.
3. Calculate total cost: Payment × months + origination fee (if any).
4. **Pick the shortest affordable term with a sensible payment.
5. Lock it in: Only then allow the hard pull and sign. Set autopay on day one.

FAQ

Do all banks offer personal loans?
No. Some don’t offer them at all, and others only for existing customers or in certain regions.

Is the lowest rate always the best choice?
Not if fees are high, funding is slow, or the term is too long. Compare APR and total cost.

Will prequalification hurt my credit?
It shouldn’t. Look for soft-pull prequalification. The hard inquiry typically happens only when you accept and finalize.

How fast can I get the money?
Online lenders can fund same day or next day after approval; banks/credit unions may take longer, but it varies.

Fixed or variable rate?
Most personal loans are fixed—predictable payments. Variable can start lower but may rise; read the fine print.

Read More:

• Maroon Financial Credit Union vs. Great Lakes Credit Union: Which Offers the Better Services?
• Is Upstart the Right Loan Company for You? An In-Depth Review
• Fast Cash Loans Online with Same Day Deposit in Ohio: Your Complete Guide
• Is a Debt Consolidation Loan a Good Idea in California?
• How to Get a Personal Loan with Bad Credit in Ohio