Best Banks For Personal Loans in 2024 - NerdWallet (2024)

• Consolidating high-interest debt.

• Renovating your home.

• Covering emergency expenses.

• Paying for a large expense like a move or wedding.

1. Check the bank’s loan criteria. Before you apply for a loan, familiarize yourself with the application requirements on the bank’s website or give the branch a call.

2. Pre-qualify, if possible. Some banks offer pre-qualification for a personal loan, which lets you check loan options without hurting your credit score. Pre-qualification is quick —complete a short application, undergo a soft credit pull and view your potential loan offers.

3. Submit your application. When you’re ready, submit a formal loan application. Required documents typically include proof of income and employment. You’ll also undergo a hard credit inquiry during this step, which temporarily knocks a few points off your score.

4. Get approved and funded. Approval can be instantaneous or take a few days, depending on the bank and if additional documentation is needed. Once approved, you’ll receive the loan documents, usually electronically, which you’ll sign and return to the lender. Funding time varies, but can be as early as same-day or up to a week.

5. Make a plan to pay back the loan. Once you receive the loan funds, it’s important to make a plan to manage your monthly payments, so you don’t fall behind, which can hurt your credit and result in late fees.

» MORE: How to apply for a bank loan in 5 steps

» MORE: Personal loan vs. line of credit: How to choose

• Customer benefits. Banks typically offer lower interest rates, higher borrowing amounts and additional perks, like a rate discount, to existing account holders.

• Convenience. If you are an existing account holder, getting a personal loan at the same bank may make the process easier and help keep track of your money.

• Better assistance. Customer service may be more robust at banks, especially if you can visit a brick-and-mortar location. You may even have the same contact person throughout the life of the loan.

• Limited pre-qualifying options. Not all banks offer the option to pre-qualify online, so you can't see your prospective rates and terms before applying and submitting to a hard credit check.

• Possible longer funding time. Funding can take longer compared to getting a loan from an online lender, though some banks offer same- or next-day funding.

• May require going to a branch. Some banks may require an in-person visit to complete a loan application or receive funding.

» MORE: Should you apply for a loan online or in person?

• Build your credit. At least a few years of credit history with on-time payments and no delinquencies will help your application. Avoid opening new accounts right before you apply (it can ding your credit) and check your credit report for errors that may be hurting your score. You can often dispute any errors online.

• Review your credit score. Many banks have a minimum credit score requirement, but a higher score gives you the best chance at a low rate. Get a free credit score with NerdWallet.

• Boost your income and pay down debt. Lowering the percentage of your income that goes to debts, also called your debt-to-income ratio, is viewed favorably by most lenders. In many cases, lenders want to see that you make enough income to cover your existing obligations, plus the loan you're applying for. The lower your DTI, the better.

• Increase your savings, if you can. Showing a lender that you've got enough money in the bank can boost their confidence that you'll make payments on time.

» MORE: 5 tips to boost your chances of personal loan approval

NerdWallet’s review process evaluates and rates personal loan products from more than 35 technology companies and financial institutions. We collect over 50 data points from each lender and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.