Where to Get a Personal Loan
- June 3, 2022
- 6 min read
- 3450 reads
There are many different places to take out a personal loan from. In this article, we’ll look into what’s the best place for you.
If you need a cash injection, you are probably inundated with lending options. But what are the best places to get a personal loan?
You should get a personal loan when it is the cheapest way to gain credit.
A personal loan is an amount of money that you borrow for a variety of personal reasons. You can get a personal loan from various lenders and require you to repay the amount borrowed over a specific period.
Whether you want a loan for home renovations or to consolidate debt finding the best loan with an excellent personal loan rate is going to be the top priority.
Best Place To Get a Loan Depends on Your Needs
Where to get a loan at the best rates? Well, it depends.
There are plenty of lenders that you could get a loan through, depending on what you need the money for and how much you need.
Ask yourself these questions:
- What do I need the money for?
- How much money do I need?
- How soon can I pay the loan back?
Figure out these questions before you decide where to get a personal loan from.
Good Places To Take Out a Personal Loan
If you want to know where to get a personal loan, here are a few options:
- Banks. Taking out a loan from a bank is typically a longer process.
- Credit Unions. Credit onions can be a good option if you have lower credit rating.
- Online Lending Companies. If you need a quick loan, then online lenders should be your first port of call.
Banks offer personal loans as one of their many lending options.
Their terms and rates will vary considerably. If you have a checking and savings, account then getting a loan can be simple as they have a record of your spending and income.
They can offer higher loan amounts than some other companies and do have competitive lending rates.
Personal bank loans can go as high as $100,000 with us different repayment options. Banks prefer customers with high credit ratings and a history of consistent income.
The downside with banks, especially, is they can take weeks to process applications, and they have strict lending policies.
Those lending policies can eliminate the ability to have your loan application approved.
If your credit is on the lower end of the scale or you have inconsistent paychecks, then there is a less likely chance that your loan will be approved.
If your loan is approved, banks may offer a higher loan rate, which can make lending unaffordable. If you do not meet the lending criteria, they may ask you to put up personal collateral, such as your car or home.
2. Credit Unions
Credit unions are non-for-profit institutes and, therefore, can offer more competitive rates than some banks.
Often applicants with lower credit ratings will be considered for lending. The negative with credit unions is that they are member-based.
To apply for a loan, you will have to become a credit union member. Membership is determined by location, employment, and other affiliations, which can make it a challenge to get a membership.
You should be able to find a credit union that you can join in your area.
If you have good credit, then a credit union loan may be the cheapest way for you to get a personal loan, especially on the higher end.
3. Online Lenders
Online lending is a massive industry that has become very competitive.
Their offer rates and APRs can rival banks and credit unions. There are many options when it comes to online lenders, but finding the right lender can be easy.
Our online loan calculator can help you find the most competitive loan to suit your needs.
Online lenders not only offer competitive rates but their application processes and fund delivery is fast, often weeks faster than alternative lenders.
This is excellent news for you if you have a low credit score.
Some online lenders can help with rebuilding your credit score over time with the right loan options.
One of the main advantages of using an online lender is that they do not have as strict lending criteria as banks.
High credit score applicants will find competitive rates without any problem. Still, many lenders offer competitive rates even for lower credit score applicants.
It is essential to make sure you are dealing with credibly online lenders. When filling out the application, ensure you know exactly what fees are associated and the loan repayment schedule.
Alternatives to Personal Loans
There are some other alternative lending options available that are not personal loans such as credit cards, retirement savings plan loans, and secured loans.
1. 0% Credit Cards
If you need a small loan, then consider finding a credit card that offers 0% introductory APRs for 12 months. If you have good credit and can pay off your debt within a year, then this is the best option because you will be paying absolutely no interest or fees for 12 months.
Check out the ABOC Platinum Rewards MasterCard. 0% Intro APR on Purchases for 12 months; after that, the variable APR will be 12.90% –22.90% (V), based on your creditworthiness
2. 401(k) loans
Lending from your 401(k) is an option but the last resort and a highly NOT recommended option. Taking from your future retirement when you will be less able to work is not wise.
You will miss out on the years of interest that money could have been accumulating for your retirement, plus you will have to pay interest on the loan.
Not all employers offer a loan option on 401(k)s. Loans usually must be repaid within 5 years.
The home equity line of credit is also an alternative to personal lending. If you have equity within your home, then you can borrow against that equity to obtain a loan. The APRs and fees on a HELOC are usually much lower than a personal loan at a bank because HELOCs have security, your home.
The danger here is, of course, the loan is secured to the house. If you default on your payments, then you stand the chance of losing your home. They offer low-interest rates, but HELOC upfront fees and costs add up.