Best Bank Loans 2024: Compare Personal Loans From Banks - NerdWallet (2024)

Discover more lenders

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

• If you already have accounts with the bank, you can keep them all in one place, making it easier to track your money.

• 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.

• Not all banks offer an online pre-qualification process, so you can't see what rates and terms you qualify for before applying and submitting to a hard credit check.

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

• 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?

» MORE: Best personal loan interest rates

1. Check the bank’s loan criteria. Before you apply for a loan, familiarize yourself with the bank’s requirements. Some banks may only accept existing customers who’ve had an account open with the bank for a certain amount of time. This information should be available on their website or you can give them a call.

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

3. Submit your application. After you pre-qualify, or if pre-qualification isn’t available, you’ll 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 what additional documentation is needed, if any. 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

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

• Review your credit score. Many banks have a minimum credit score they'll accept from a borrower, but aim above the minimum requirement for the best chance at a low rate. You can get your free credit score with NerdWallet.

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

• Increase your savings, if you can. Showing a lender that you've got enough money in the bank to cover a difficult time 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.