Investing News

Big Banks That Don’t Offer Personal Loans

Bank of America and Chase are among the banks that don’t offer personal loans

Fact checked by Rebecca McClay

Bank of America, Chase, and Capital One are among the nation’s largest banks that don’t offer personal loans. If you are planning to apply for a personal loan, you might think a big bank is your first stop. Some banks may only offer personal loans to existing customers, and some big banks do not offer personal loans at all. Instead of a big bank, your best bet may be to compare the best personal loans and then decide which is right for you.

Key Takeaways

  • Bank of America, Chase, and Capital One are among the nation’s largest banks that don’t offer personal loans.
  • Banks offer a variety of financial products, and some institutions—especially large banks, may exclude personal loans from their product offerings.
  • Although many smaller banks do offer personal loans, you can also explore personal loan options offered by online lenders and credit unions.

Reasons Why Some Banks Don’t Offer Personal Loans

Banks are financial institutions that offer many different types of financial products, like checking and savings accounts, credit cards, and mortgages. Unsecured personal loans are not typically larger banks’ main focus but many smaller banks do offer personal loans. Some banks may simply determine that personal loans do not fit in their other loan offerings.

Banks That Don’t Offer Personal Loans

A personal loan is typically an unsecured loan that you can get for varying amounts, normally ranging from $1,000 to $50,000, but sometimes as much as $100,000. You repay the loan back in regular monthly payments with interest.

If you are planning to apply for a personal loan, keep in mind there are a few major banks that do not offer this type of loan, including Bank of America, Chase, and Capital One.

Bank of America

While Bank of America does not offer personal loans, it does offer numerous other personal financing options in addition to its checking and savings accounts. You can apply for a variety of credit cards, such as rewards credit cards, student credit cards, or credit-building credit cards.

Bank of America also offers home loans like mortgages, home equity loans, refinanced mortgages, as well as auto loans. Finally, it offers credit cards and lending services for businesses.

Chase

Although Chase is a big bank that does not offer personal loans, it does offer other types of lending products like personal credit cards, home loans, and auto loans. Chase also offers deposit products like checking, savings and CD options.

Businesses and commercial enterprises can also explore numerous financing solutions with Chase.

Capital One

Personal loans are not available through Capital One, but Capital One does offer many different lending options for individuals and businesses. You can apply for credit cards with different rewards programs, such as travel points or cash back rewards. You can also get an auto loan through Capital One.

Businesses and commercial lending services can apply for credit cards and lines of credit.

Other Places to Get a Personal Loan

While some of the nation’s largest banks do not provide personal loans, borrowers still have plenty of options for getting financing for their needs.

As you consider your choices, you can use a personal loan calculator to figure out your monthly payments and the total cost of the loan depending on your loan’s APR and term.

Other Banks

Keep in mind that some banks and financial institutions will only offer personal loans to existing customers. For example, you must have an active American Express Consumer Card to apply for a personal loan with American Express.Smaller regional or community banks may also be potential sources for personal loans once an account relationship has been established.

Online Lenders

Many online lenders specialize in personal loans. Online lenders may be more willing than banks to work with borrowers who have poor credit, in particular.

If you are looking for a quick loan, some online lenders are able to offer same-day funding. For example, Rocket Loans will submit an ACH credit to your bank account if you complete the loan process and sign the promissory note by 1 p.m. ET on a business day.

You can compare online personal loan rates to find the best option for you.

Credit Unions

Credit unions are non-profit, member-owned enterprises that provide banking services. Borrowers may be able to get a personal loan with a lower interest rate at a credit union than at a bank. In the second quarter of 2023 , the national average interest rate for an unsecured fixed rate loan with a 36-month term offered by credit unions was 10.32%. The national average for banks was 11.04%.

Most credit unions will require you to become a member before they will offer you a personal loan. Credit unions can be state-chartered or federally chartered. Like you would any other financial institution, you can compare options to determine the best credit union for your needs.

What Are the Best Alternatives to a Personal Loan?

Personal loans are not the right fit for everyone. Borrowers can consider alternatives such as a credit card, a line of credit or borrowing money from a retirement account. Each borrowing option has pros and cons to weigh before you decide what works best for you.

Why Doesn’t My Bank Approve My Personal Loan Application?

Banks vet personal loan applications based on many different criteria, including your credit score, your income and your debt-to-income ratio. If your personal loan application is denied, your credit score or income may be too low or your debt-to-income ratio may be too high. It is also possible you made a mistake on your application.

Banks and other creditors are required to tell you why your application was rejected under the Equal Credit Opportunity Act (ECOA).

Which Bank Has the Best Personal Loan Rates?

The best personal loan rates will depend on your eligibility. If you have a high credit score and high income, you are a desirable loan candidate and likely to qualify for a lower interest rate. Prequalifying for a few different loans can help you compare interest rates and loan terms without affecting your credit score.

What Credit Score Is Needed for a Personal Loan?

Lenders have varying credit score requirements. Some lenders are willing to work with people who have poor or fair credit, some are not. Typically, a credit score of 670 or higher will give you access to the best personal loan terms.

How Long Does It Take for a Bank to Approve a Personal Loan?

The approval process for getting a personal loan will vary depending on the bank. You can typically expect loan approval and funding to take one to five business days.

The Bottom Line

Not all big banks will offer personal loans, but you can explore options at other banks, credit unions, and online lenders. Prequalifying for loans and comparing rates can help you find the best personal loan for you without impacting your credit.

Read the original article on Investopedia.

Newsletter