Where can I get a personal loan?

You can get a personal loan from a bank, a credit union or an online lender. The key to getting a personal loan is to do your research, both on the loan providers and the terms of their offers. WalletHub makes it easy to compare personal loans and has user reviews for lenders big and small. Once you’ve decided on the right loan for you, WalletHub can bring you directly to its secure online application.

Below, you can get to know the major players and see where most other consumers have gotten their personal loans.

Popular Personal Loan Companies:

• American Express
• Avant
• Discover
• LendingClub
• Lightstream by SunTrust Bank
• Marcus by Goldman Sachs
• Prosper
• SoFi
• Wells Fargo

Before applying for a personal loan, you may also want to check for pre-qualification. If you are pre-qualified for a personal loan, your chances of actually being approved are very high but not guaranteed. Pre-qualification uses a harmless soft inquiry while actually applying for a loan triggers a hard inquiry that may temporarily lower your credit score. You can use WalletHub’s free tool to check your pre-qualification status with multiple lenders at once.

On that note, your credit score will affect where you can get a personal loan. Big banks tend to offer loans to people with good or excellent credit. Credit unions, which have a more personal connection with their clients, are more likely to offer personal loans to applicants with lower scores. Online lenders are the newest players, and some of them offer bad credit loans as well.

Now that you know where to get a personal loan, it’s also important to take note of where NOT to get a personal loan – a payday lender. Payday loans go by many names, including payday advances, payroll loans and cash advance loans. With this type of loan, the lender lets you borrow money against your next paycheck. Since payday loans are short-term, the finance charges are incredibly high to ensure the lender makes money. Lenders usually charge a fee on the borrowed amount that is equivalent to an APR of over 300%-600% in most cases. It’s best to avoid these types of loans altogether.

The most common places to get a personal loan are banks, credit unions and online lenders. Altogether, they issued $21 billion in personal loans to U.S. borrowers in 2018, according to TransUnion, leaving a total of $138 billion in outstanding balances at the end of the year. Online lenders issue the largest share of personal loans, but each type of personal loan provider has advantages and disadvantages in terms of approval requirements, cost, application options and more.

Where to Get a Personal Loan:

• Banks – 15 of the 20 largest banks in the U.S. offer personal loans. The list of banks with personal loans includes the likes of Wells Fargo, American Express and Citibank.
• Credit Unions – The top 10 credit unions in the U.S. all offer personal loans. Some of the best credit unions for personal loans are Alliant CU, Connexus CU and NASA FCU because anyone can join.
• Online Lenders – Online lenders account for more than 40% of new personal loan originations, according to Experian. Some of the best online lenders include LightStream by SunTrust Bank, SoFi and Marcus by Goldman Sachs.
• Family & Friends – Borrowing from someone you know can be less expensive, but more dangerous because your relationship is on the line.

Getting a Personal Loan From a Bank: The main advantage of a bank is that it has branches, which allows you to apply in person with a credit specialist. In addition, there’s the potential to get low APRs, as low as 6% in some cases and usually no more than 25%. But banks tend to have higher credit score requirements than other lenders, typically 660+.

Getting a Personal Loan From a Credit Union: Credit unions also have branches, and they have the benefit of not being for-profit institutions. Federal credit unions are also required to keep their APRs at 18% or lower. And credit unions are more likely than banks to cater to people with bad credit.

However, credit unions have specific requirements for membership. Those that allow anyone to join usually charge a one-time donation of $5-$25.

Getting a Personal Loan From an Online Lender: Online lenders have the fastest processing times and are more often willing to work with people with bad credit than banks. However, they do not have any branches. And they have higher upper limits to their interest rates, ranging from around 6% to 36%. Some of popular online lenders include Avant, LendingClub and SoFi.

Banks, credit unions and online lenders aren’t the only places to get a personal loan, but they are the only ones you should consider most of the time. There are also predatory payday lenders and auto title companies that lend money against your next paycheck or your car. But they charge excessive interest, and you should avoid them. Similarly, you could get a loan from a pawn shop, but you can expect high costs and you risk losing your item if you can’t pay them back.

Lastly, you can borrow from family or friends. This can be the least expensive approach, depending on the circumstances, but you also risk ruining your relationship if you can’t pay the loan back.

For more information on how to find the best lender for you, check out WalletHub’s article on the best places to get a personal loan.