What banks do personal loans?

Personal loans let you borrow a sum of money from a lender and then pay it back in monthly installments over a set term – usually anywhere from 12 to 84 months. Those monthly payments include equal portions of the original loan amount, plus interest and fees. Personal loans can be used for debt consolidation, home improvements, vacations, big purchases and more. Understanding how things will go, from the time you apply to when you submit your final payment, is the key to making personal loans work for you.… read full answer

How Personal Loans Work

• Lenders Review Applications.

  You will need to provide personal information (such as your address and SSN), financial information (such as your income and employment status) and more. The lender will evaluate and hopefully approve you.

• Applicants Receive Funds After Approval.

  The issuer of the loan will deposit the money into your bank account as a lump sum. You can do whatever you wish with the money, unless the terms of the loan say otherwise.

• Interest Charges Accrue.

  From the day you take out the loan, the amount will begin accruing interest at a rate set by the issuer. So no matter how long it takes you to pay the loan back, you’ll always owe more than you originally took out.

• Borrowers Make Monthly Payments.

  The lender will give you a required amount to pay each month. You can pay more if you’d like, but make sure that there’s no penalty for paying the loan off earlier than the terms of the contract stipulate. Some lenders may charge a fee.

• Loan Payments Build Credit.

  The lender will report to the credit bureaus whether you’ve paid on time each month. Once you’ve paid off the entire balance, including interest and fees, the lender will report your loan as paid in full. Abiding by the terms of your loan can help increase your credit score.

Personal loans are pretty simple. You just have to make sure to submit your payments every month, and setting up automatic monthly payments from a bank account can go a long way in that regard. The most complicated part of the process is probably selecting the correct loan, but WalletHub’s comparison tool makes that easy.

To get a personal loan from a bank, first check your credit score, then compare available offers to find the best rates, fees and payoff periods. After that, check for pre-qualification, submit an application either online or in person and wait for a decision. The steps may not sound all that complex, but preparing to get a loan can be time consuming.… read full answer

How to Get a Personal Loan from a Bank

Check Your Credit

The first step in getting a personal loan from a bank is always to check your credit score and reports because credit history is the biggest deciding factor for approval and most personal loans require a credit score of 660 or higher. There are some major banks that offer secured personal loans for people with bad credit, including Wells Fargo, PNC, Fifth Third Bank and KeyBank. But if your score is on the lower side, you may want to consider credit unions or online lenders instead, as they are more likely to offer personal loans for bad credit.

Choose Between the Available Offers

Next comes the most difficult part of the process, comparison shopping. WalletHub’s tool can help you find available loans from banks that cater to your credit level. From there, you can choose which loans are best for you based on their lengths, required payments, interest rates and more.

Check for Pre-qualification

Once you’ve decided on a few good options, you will want to check if you are pre-qualified for any of them. The bank may have a tool to do this on their website, or you may be able to check in a branch. If you want to get pre-qualified with multiple lenders at once, you can use WalletHub’s free pre-qualification tool. Getting pre-qualified means you have very high (but not 100%) chances of being approved. Pre-qualification also has no effect on your credit.

Apply Online or in Person

Eventually, you’ll settle on one personal loan. At that point, you can apply either online or at a bank branch. Applying online typically gives you the fastest decision, since it’s automated. But applying in-branch may plug you right into an automated system, too. And you’ll have the expertise of a banker with you.

Wait to Hear Back

In most cases, it won’t take long to receive a decision. You may get one instantly, and typically won’t have to wait more than a few business days. Occasionally, it could take up to a few weeks. After you’re approved, it will usually take at least one business day for the bank to transfer the funds to you.

There aren’t too many differences between how to get a personal loan from a bank and how to get one from other types of lenders. But there are a few. First off, you’re more likely to need a credit score of 660 or better to get a loan from a bank, while credit unions and online lenders are more likely to cater to people with subpar credit. In addition, unlike online lenders, banks offer the ability to apply in person. You can have a credit specialist sitting right there with you as you apply.