App version: 0.1.0

Where to Get a Personal Loan

Where to Get a Personal Loan
Austin Kilham
Austin KilhamUpdated March 14, 2023
Share this article:
Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
If you’re looking for a personal loan, there are a number of different places you can turn to. Which one you ultimately choose will likely depend on where you can get the lowest interest rate and best terms. To find a loan that’s the right fit for your needs, you’ll want to explore the options available at banks and credit unions and from online lenders. Each of them has advantages and drawbacks. Here’s a closer look at all three options so you can make an informed decision about where to get a personal loan.

Personal Loans From Banks

A bank may be the first place you think of as you’re considering where to get a loan. Banks typically offer many types of lending products, including personal loans. They may also offer high loan amounts, but you will generally need a higher credit score to qualify. If you’re already a customer of the bank, they may extend certain perks, such as a lower APR on a loan.  
Pros of Choosing a BankCons of Choosing a Bank
May offer preferential rates to existing customers.May require a higher credit score. 
Might offer lower APRs.Might require you to apply in person. 
Loan amounts could be higher, if you need to borrow more money.May need to be a bank customer to qualify.

Personal Loans From Credit Unions

Credit unions are not-for-profit organizations. Because they aren’t seeking profits, credit unions may offer better rates for loans than banks. However, qualifying for a loan at a credit union requires membership, though it’s usually relatively simple to apply and join.Credit unions might also offer a variety of personal loans. This could include options such as payday alternative loans, which are small, short-term loans. 
Pros of Choosing a Credit UnionCons of Choosing a Credit Union
Due to their not-for-profit nature, they might offer lower interest rates than banks.Must be a member to qualify.
Loans may be easier to qualify for as long as you’re a member.Loan amounts may be smaller.
Credit unions tend to be local institutions, so there may be fewer branches you can go to for assistance.

Personal Loans From Online Lenders

As you’re asking yourself, “where can I apply for a personal loan?,” you’ll want to check the options available from online lenders. Without brick-and-mortar locations to maintain, online banks can save money that they might pass along to borrowers through lower fees. Online banks also offer a streamlined application process that can provide borrowers with access to loan funds in a matter of days. Another advantage: You may be able to prequalify for a loan, which involves a soft credit inquiry that doesn’t impact your credit score. This allows you to shop around with different online personal loan lenders to see what terms and interest rates they might offer you.Some online banks specialize in certain types of loans, such as loans for borrowers with bad credit. 
Pros of Choosing an Online BankCons of Choosing an Online Bank
Fast application processInterest rates may be higher, especially for borrowers with bad credit.
Prequalification helps you shop around for loans without impacting your credit score.There is no physical location where you can get personalized service and help with your loan. 
There may be options available for borrowers with bad credit.

What to Consider When Looking for a Personal Loan Lender

As you’re exploring the different options, there are several factors that could help with finding the right loan and lender.

Prequalification

Check to see if the lender offers prequalification. With this process, lenders check your credit history to give you a sense of whether you’re likely to qualify for a loan and the rates and terms you may get. Many online banks offer prequalification.

Loan Amount

Know how much you need to borrow. You’ll be paying interest on that amount, so you don’t want to borrow too much. At the same time, be sure that the lender can offer you a big enough loan to cover your needs. Banks may offer higher loan amounts, but you may need a high credit score to qualify. Credit unions may offer lower amounts, but their loan requirements tend to be less stringent.

Fees

There are pros and cons of a personal loan, and fees could be one of the disadvantages. For example, a lender might charge origination fees to cover the cost of processing the loan. The size of the fees and how lenders calculate them vary. Find out what fees there might be on any loan you’re considering. Recommended: Guide to Private Lenders and How They Work

Tips for Applying for Personal Loans

When you find a lender and a loan that suits your needs, you’ll begin the application process. These personal loan approval tips can help ensure that it goes smoothly. 
  • Check your credit. Review your credit report to make sure everything is correct. If you spot any mistakes, alert the credit reporting bureaus immediately. 
  • Make sure your debt-to-income ratio (DTI) is low. Your DTI is a comparison of your gross monthly income to your monthly debt, including other loans you might have, since it’s possible to have more than one personal loan. If your DTI is too high, lenders may worry that you’ll have trouble repaying the loan. Aim for a DTI of 35% or less. If yours is higher, try to pay off some of your debts, or look for ways to increase your income.
  • Keep your employment stable. This may not be the best time to change jobs. Lenders want to see that you have a steady source of income so you can pay your monthly loan bill. If you plan on switching jobs, you might want to wait until after you qualify for a loan. 
  • Assemble the proper documents. Each lender will have a specific list of requirements for the application process. Read the application carefully, and make sure you provide all of the necessary documentation. This might include personal identification, pay stubs, and tax returns.

Personal Loans with Lantern

Where to get a personal loan depends on your needs and financial situation. Banks, credit unions, and online lenders could all be good options. The smart thing to do: Shop around to see what loans the different lenders offer, and the best interest rates and terms you can get. Lantern by SoFi can streamline the process for you. With our online tool, you can quickly and conveniently compare personal loans from multiple lenders all at once to find the rates and terms to fit your needs.

Frequently Asked Questions

What is the easiest place to get a loan?
Is it safe to get a personal loan online?
Is it hard to get a personal loan from a bank?
Photo credit: iStock/Baris-Ozer
LCPL1022004

About the Author

Austin Kilham

Austin Kilham

Austin Kilham is a writer and journalist based in Los Angeles. He focuses on personal finance, retirement, business, and health care with an eye toward helping others understand complex topics.
Share this article: