Unsure of where to apply for a personal loan? If you run a quick search online for personal loans, you will find a myriad of options. However, picking the right lender is important since it can affect the cost of your loan and your overall borrowing experience. So, if you are looking for a loan, here’s where you need to look.
Conventional Banks
Conventional banks offer personal loans for different terms, amounts, and interest rates. Borrowers can borrow up to $100,000 for interest rates between 6%-25%. However, the terms of your loan will vary based on your repayment capacity, debt-to-income ratio, and credit score. One of the advantages of applying to a conventional bank is that they usually have several branches across the country, meaning you walk into any branch and speak to a credit specialist. Further, many big lenders also accept online applications. That said, conventional banks usually require applicants to have a credit score above 660 to qualify for a personal loan.
Credit Unions
Credit unions offer personal loans to members at competitive interest rates, given that they are not-for-profit organizations. However, credit unions usually don’t have large networks like conventional banks. To apply for a loan from a credit union, it’s likely that you’ll need to personally visit a branch. One drawback of credit unions is that membership is usually not open to everyone.
Online Lenders
Online lenders offer personal loans with competitive terms and they also disburse funds a lot faster than traditional banks and credit unions. Another key benefit of applying for a personal loan to an online lender is that you don’t need a perfect credit score to get approved. The interest rates charged by online lenders can range between 6%-36%. Ideally, you should avoid applying to online lenders that charge a very high rate of interest.
Peer-To-Peer Lending
Marketplace lenders or peer-to-peer lenders can be a good choice if you want to borrow a small amount of money for a short period. In peer-to-peer lending, there are usually multiple individuals who will fund your loan. So, while interest rates can be competitive, the loan disbursal process may also take longer.
These are your best options if you are looking for a personal loan. A word of advice – avoid taking high-interest loans like payday loans and car title loans, at all costs.
