Finding the best place to get a loan could get a little challenging for some, but the good thing is, there are so many options out there, and it all boils down to finding your perfect match based on your personal needs and preferences.
According to the data from the Chamber of Commerce, there are 21.1 million outstanding personal loans in the United States. Over 19 million consumers do have an existing unsecured personal loan as compared to the 176 million Americans with credit cards.
You see, these numbers only show that a lot of people in the U.S. do have an existing loan and that the lending industry is booming – no wonder why banks, credit unions, and recently, online lenders continue to prosper. A lot of people need their services.
Anyway, speaking of banks, credit unions, and online lenders, these three are the three major places where you can get a loan. All three of them have their respective highs and lows. But the question is, where is the best place to get a loan?
Well, that is exactly what we are going to tackle today. We are going to share with you different options in each category where you can get the best deals when it comes to borrowing money. Know that at the end of the day, the best place to get a loan will depend from one person to another. As we have mentioned earlier – it will all depend on your personal needs and preferences.
Banks are everywhere. Some of them have been around for decades, and have earned their credibility over the years. Loaning or borrowing from banks usually requires the borrower to apply in person. Needless to say, banks tend to have stricter requirements when it comes to the approval of loan applications.
Let’s face it though, compared to the other two options, one major draw of getting a loan from a bank is that they are present in different places. They have branches in almost every state (depending on the bank, of course).
Although the traditional application does still exist, thanks to the advent of digital technology and the internet, a lot of banks now offer an online application, which makes the process easier and more convenient for both parties.
While the online application is more convenient and time-saving, applying in a branch provides you with amazing benefits like you can ask help from a credit specialist to recommend the best loan the bank offer, and he or she may also walk you through the process. Furthermore, in most cases, you may also find the delivery process faster especially if you already have an existing saving or checking account with the bank.
However, borrowing money from banks does also has its share of drawbacks. One, a lot of major banking institutions require fairly high minimum credit scores to get approved for a loan. Usually, they require a 660 credit score or higher. Having said that, banks are not ideal for people with bad or no credit at all. Two, some major banks like PNC, KeyBank, Wells Fargo, and more offer secured personal loans, which requires borrowers to put up collateral. This means, if the borrower fails to pay off the loaned amount, he or she will have to turn over the collateral to the bank.
Interest rates vary from one bank to another, also, depending on your credit. However, usually, banks do not charge more than 25%, while the lowest interest rate could be as low as 6%.
PROS AND CONS OF LOANING FROM BANKS
For your further reference, here are some of the pros and cons of borrowing money from banking institutions:
|There are a lot of branches to where you can apply for a loan from.||They have stricter loan application requirements.|
|Some banks offer online loan applications.||Most banks, particularly the major ones, require fairly high minimum credit scores.|
|A credit specialist can recommend the best loan the bank can offer.||Some major banks require collateral.|
|When applying in-person, you can ask your credit officer to walk you through the whole process.|
|The delivery process is faster when you have an existing current or savings account with the bank.|
BEST BANKS TO GET A LOAN
For your reference, here are some of the best banks to get a loan from:
- American Express – More popularly known as Amex, American Express is (obviously) an American multinational company that offers financial services. Headquartered in New York City, the bank offers various products and services, which include credit cards, prepaid cards, corporate programs, as well as savings accounts and CDs, gift cards, and personal and business loans.
- Citibank – Citibank is another major banking institution that offers a variety of products and services including credit cards, as well as personal and business loans. The company is the consumer division of financial services multinational Citigroup. Founded in 1812, the company is headquartered in New York.
- U.S. Bank – U.S. Bancorp is an American bank holding that is based in Minneapolis, Minnesota. The company is also incorporated in Delaware. U.S. Bancorp is the parent company of the U.S. Bank National Association, which is one of the largest banks in the United States.
- Wells Fargo – Wells Fargo & Company is another American multinational financial services company. Headquartered in San Francisco, California, the company does have central offices across the country. Also, it is currently the world’s fourth-largest bank based on market capitalization. In addition, it is the fourth-largest bank in the US based on total assets.
- KeyBank – KeyBank is the primary subsidiary of the KeyCorp, which is a regional bank that is headquartered in Cleveland, Ohio. As of this writing, KeyBank is listed as one of the largest banks in the country. The bank offers a variety of products and services, and one of them is loans.
- PNC – PNC Bank is headquartered in Pittsburgh, Pennsylvania. It offers a wide variety of services for all types of customers — from individuals to small businesses up to private corporations and government offices.
- TD Bank – Tagged as America’s Most Convenient Bank, TD Bank, N.A is both an American national bank and subsidiary of the Canadian multinational Toronto-Dominion Banks (thus the name). The bank offers a wide range of products and services including credit cards and personal loans.
- Discover Bank – Discover Bank is an FDIC-insured online bank. It offers a number of product selections like a debit card that offers cashback rewards. Unlike the other banks we mentioned, Discover Bank does only has one branch, which is located in Greenwood, Delaware.
- Fifth Third Bank – Fifth Third Bank offers all personal banking solutions depending on your needs. The Fifth Third Bank is headquartered in Cincinnati, Ohio. It is the primary subsidiary of the Fifth Third Bancorp, which is a bank holding company.
Before we move on, sharing with you an interesting review from Honest Finance wherein he tackles his 3 best personal loan companies. Check the video out by clicking the play button below:
A credit union is probably the best place to get a loan from. A credit union refers to a member-owned financial cooperative. It’s a not-for-profit organization that is controlled by the members and is operated on the principle of people helping people. A credit union provides its members with different financial services including credit at competitive rates.
Compared to banks, credit unions are not as popular. Credit unions usually service a limited are, which is why if you are opting for this option, it is best to do a search of credit unions near you first. You may also give them a personal visit or check their website to see what types of loans they offer.
Meanwhile, like banks, credit unions also allows you to apply for loans in person. Since credit unions are more community-oriented, they are more likely to approve loans even with people who have subpar credit.
What we like about credit unions is that they offer interest rates that are lower compared to banks. They are able to provide a lower interest rate because federal credit unions have an interest rate cap set by a national board. As with state credit unions, they have a cap set by the state government. Moreover, at most, credit unions can only charge up to 18% interest rate.
Just like banks, credit unions have their share of drawbacks as well. This includes eligibility for membership. Most credit unions base their membership requirements on a relationship with an existing member; living, working or going to school in a particular area; or working for a specific company. So, it is just right that if you are looking at borrowing money through this channel, you better check if you are qualified for membership first.
PROS AND CONS OF LOANING FROM CREDIT UNIONS
For your further reference, here are some of the pros and cons of borrowing money from credit unions:
|You are a member of the credit union, which makes you a part-owner of the organization.||You are required to pay a membership fee (which costs between $5 and $25) to be able to join.|
|Credit unions have lower fees than many commercial banks out there.||Not all credit unions are insured.|
|They offer better rates (maximum is 18%) as compared to traditional banks.||Credit unions have limited branches and ATMs.|
|Based on reviews, customer service at credit unions are better than commercial banks.||They offer fewer services compared to banks.|
BEST CREDIT UNIONS TO GET A LOAN
For your reference, here are some of the best credit unions to get a loan from:
- Affinity Federal Credit Union – Affinity Federal Credit Union is a credit union that is based in Basking Ridge, New Jersey. The organization offers comprehensive services, which include checking and savings accounts, mortgage, home equity, as well as business solutions, auto loans, credit cards, and many more.
- Aspire Federal Credit Union – Headquartered in Clark, New Jersey, Aspire Federal Credit Union is a full-service, not-for-profit financial cooperative. It is listed as the 19th credit union in the said state. It is also one of the largest credit unions in the country.
- Georgia’s Own Credit Union – As the name suggests, Georgia’s Own Credit Union is a credit union that is based in Atlanta, Georgia. Founded in 1940, Georgia’s Own Credit Union is tagged as the third-largest credit union in Georgia has more than 188,000 members as of 2018.
- Pentagon Federal Credit Union – More popularly known as PedFed, Pentagon Federal Credit Union is one of the country’s federal credit unions. Headquartered in McLean, Virginia, the credit union is federally insured by the National Credit Union Administration. As of this writing, the credit union serves 1.75 members from all over the globe.
- NASA Federal Credit Union – Headquartered in Upper Marlboro in Maryland, the NASA Federal Credit Union holds nearly $3 billion in assets and is also one of the credit unions that is insured by the National Credit Union Administration. As of this writing, the credit union boasts about 177,000 members from all over the country.
From the name itself, online lenders refer to money lenders that operate entirely online. Online lenders are known to offer better interest rates, as well as smaller service fees compared to traditional banks. For obvious reasons — as they do not have the same overhead cost as banks or credit unions.
Unlike banks and credit unions, online lenders have not been around that long yet. However, the industry is growing. One of its major draws is that you won’t have to wait long to receive a decision and get funded once approved.
Unfortunately, unlike banks and credit unions, online lenders’ interest rates tend to be higher. This depends though on your credit. Some online lenders charge as high as 36% especially if your credit is not that good. Meanwhile, they can get as low as a 6% rate of your credit is great. Unlike banks, online lenders are more willing to lend people with bad or no credit at all.
PROS AND CONS OF LOANING FROM CREDIT UNIONS
For your further reference, here are some of the pros and cons of borrowing money from online lenders:
|Application made easier and more convenient as everything is done online.||Interest tends to be higher compared to banks and credit unions.|
|Borrowers need not worry about numerous lenders having to access their credit reports.||There’s a tendency that lenders may continue contacting you even after the loan is paid off.|
|Online lending websites let you compare several loans offers all at once.||You will have to manage the loan online only.|
|Suitable for people who do not qualify for a bank or a credit union loan, and needs the money immediately.|
BEST ONLINE LENDERS TO GET A LOAN
For your reference, here are some of the best online lenders to get a loan from:
- SoFi – Short for Social Finance, Inc., SoFi is an American online personal finance company that provides different financial services including personal loans, mortgages, as well as student refinancing, investing, and banking. The company was founded in 2011 and is headquartered in San Francisco, California.
- Marcus by Goldman Sachs – Marcus by Goldman Sachs or simply Marcus was named after one of the founders of Wall Street Bank, Marcus Goldman. It is an online bank that offers competitive rates on both savings accounts as well as a liquid certificate of deposit. What people like about Marcus is that it keeps things simple and at the same time, inexpensive.
- LendingClub – Headquartered in San Francisco, California, LendingClub is an American peer-to-peer online lending company. It the first online lending company that registers its offerings as securities with the Securities and Exchange Commission. Also, it is the first to offer loan trading on a secondary market.
- LendingPoint – LendingPoint is an online lending company that is based in Kennesaw, Georgia. It was founded in 2014 to help borrowers improve their personal credit. LendingPoint offers loan options to borrowers with a fair credit score of 600 or higher.
- FreedomPlus – Based in San Mateo, California, FreedomPlus is an online lender that focuses primarily on underwriting loans to consumers. FreedomPlus is known to provide same-day loan decisions and funding within 48 hours. FreedomPlus is the consumer brand of the Freedom Financial Network, LLC.
WHAT TO LOOK FOR IN A PLACE TO LOAN
Now that we have already provided you a list where is the best place to get a loan from, it is also important that you know what the criteria are when looking for the best place to get a loan. Here are some of them:
APR – This has to be first. Always make sure to compare the annual percentage rate if you want to get the best interest rate. As much as possible, the goal is to get the lowest rate possible.
Credit Score Required – Another important thing criteria to look into is the credit score requirement. Make sure you make the cut.
Fees – You do not want surprises especially when it includes paying fees, right? So, as you do your search, do not forget to look into the fees that come with every transaction.
Approval Process – If you are in a rush to get a loan, you better check the lender’s approval process. This will help you decide whether or not you will get the money in time.
FINAL THOUGHTS ON THE BEST PLACE TO GET A LOAN
As we said earlier, there are many lending companies/institutions out there. In fact, there are too many it can get a little overwhelming to decide where to transact with. But of course, out of the many, there will always be one that will stand out to be the best place to get a loan from.
Have you found your best place to loan from yet?