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Best Banks for Personal Loans for February 2024

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If you need cash to get you through a financial crunch, a personal loan could be a reasonable option. Personal loans often have lower interest rates than credit cards, and some lenders offer same-day approval and funding.

RELATED: Best Credit Cards

Here’s a look at the best banks and credit unions for personal loans to help you make an informed borrowing decision.

Best banks for personal loans compared

Navy Federal Credit Union Personal Loans

Military and veteran households

Borrowers with excellent credit

Borrowers with less-than-excellent credit

Our recommendations

Best for low fees: Discover®Bank

Discover® Bank

Loan amount

$2,500 to $40,000

Discover® personal loans stand out for their low fee structure, which is ideal for cost-conscious borrowers. Personal loans from Discover don’t have any origination fees or prepayment penalties, so most borrowers only pay interest charges.

If you’re using Discover® Bank for debt consolidation, it can pay off your outstanding loans and credit cards directly on your behalf. Interest rates are competitive for borrowers with outstanding credit, and you can borrow up to $40,000 with terms from 36 to 84 months.

In addition to personal loans, Discover® Bank is a good option for low-cost banking. It features low-fee checking accounts and high-yield savings accounts with no minimums.


Best for fast funding: Axos Bank

Axos Bank Personal Loans

Loan amount

$7,000 to $50,000

Axos Bank offers funding as early as the same day you accept your loan terms, though it can take up to three days after signing your final loan agreement. You can prequalify and get your loan options in minutes.

You’ll need a credit score of at least 700 to qualify, and loans are available for up to $50,000, with terms of 36 to 72 months. There’s no prepayment penalty, but loans incur an origination fee of 1% to 2% based on your credit rating.

If you like Axos Bank, you may also enjoy its online banking offerings, including a rewards checking account with no fees and a full suite of accounts, including savings, investing, business banking, auto loans, and mortgage loans.


Best for auto loan refinancing: PenFed

While PenFed offers excellent personal loans, we picked PenFed for its auto loan refinance offering. You can refinance an auto loan up to $150,000 with a competitive interest rate. Terms range from 36 to 84 months, helping you balance costs and monthly payments. Remember, a lower monthly payment with a longer term may cost more in the long run.

For traditional personal loans, you can borrow up to $50,000 with interest rates from 7.99% to 17.99%. You can borrow up to $50,000 with terms of up to 60 months, and there are no origination or prepayment penalties. Funds are typically received one to two days after approval.

PenFed is a full-service credit union also offering checking and savings accounts, credit cards, and home loans. You have to be a member to get a loan from PenFed, but it’s open to anyone without membership restrictions.


Best for large personal loans: SoFi

Big loan amounts

Big loan amounts

SoFi Personal Loans

Loan amount

$5,000 – $100,000

SoFi features personal loans from $5,000 to $100,000. There are no origination, prepayment, or late fees, and terms range from 24 to 84 months. An unusual feature of SoFi personal loans is unemployment protection. If you lose your job, SoFi may change payment terms temporarily while you get back on your feet, and there’s support to find a new job.

Rates are not the lowest around, depending on your credit, but you can get funding as soon as the same day your loan is approved. If you have good credit, consolidating credit card debt with a SoFi loan could lead to significant interest savings and put you on track to get out of debt permanently.

In addition to personal loans, SoFi offers excellent checking and savings accounts, a cash back credit card with no annual fee, investment accounts, and other types of loans.


Best for military and veteran households: Navy Federal Credit Union

Navy Federal Credit Union Personal Loans

Loan amount

$250 to $50,000

Navy Federal Credit Union is a nonprofit financial institution open only to households with a military connection, including the Department of Defense or National Guard. Navy Federal personal expense loans are available with competitive interest rates, and you can borrow as little as $250.

In addition to the personal expense loan, Navy Federal features home improvement loans, debt consolidation loans, and personal loans secured by savings or certificate of deposit (CD) accounts. Secured loans come with extremely low interest rates compared with most other personal loans.

Like other credit unions, Navy Federal also offers competitive checking, savings, credit card, auto loan, and mortgage accounts. If it’s an option for your family, moving all of your accounts to Navy Federal may be a good choice.


Best for borrowers with excellent credit: LightStream

LightStream

Loan amount

$5,000 to $100,000

LightStream personal loans offer one of the lowest interest rates we’ve found for qualifying borrowers. Still, even if it isn’t your lowest offer initially, it may be your lowest-priced loan once you factor in the Rate Beat Program. LightStream offers a rate that’s 0.10% lower than any comparable unsecured loan you’re approved for elsewhere.

The company specifies that good to excellent credit is required, and loans are listed with terms up to 144 months for certain uses, such as home improvement. LightStream is also a standout for offering loans with no fees of any kind, including origination, prepayment, and late fees.

LightStream is exclusively a personal lender with no bank accounts or other loan offerings. Behind the scenes LightStream is operated by Truist Bank, which offers a full suite of banking products and services.


Best for borrowers with less-than-excellent credit: Avant

Avant

Loan amount

$2,000 to $35,000

While the average borrower with Avant has a credit score of 600 to 700, it approves some borrowers with credit scores as low as 580, one of the lower credit score thresholds we’ve found. Be aware, however, that borrowers with lower credit scores pay higher interest rates, and the top rates at Avant exceed a 35% annual percentage rate (APR).

Loans are also subject to an “administrative fee” of up to 4.75%, which is a steep cost for loan origination. Avant loans are often one of the fastest lenders for approval and funds receipt. In many cases loan funds are received as soon as the next business day.

In addition to personal loans, Avant offers a credit card designed to help users build credit. No other banking services are available through Avant.


Methodology

To choose the best banks for personal loans, we reviewed more than a dozen lenders with a focus on interest rates, fees, loan amounts, loan terms, approval times, and credit requirements. We aimed to pick loans for a variety of borrowers and use cases.

In each category we looked for lenders with best-in-class offerings. Where multiple lenders were identified as top options in the category, rates and fees were the most significant factor used to determine winners.

Tips for comparing best banks for personal loans

Every borrower is different, so there’s no perfect personal loan for everyone. Here are several of the most important factors to consider when choosing a personal loan for your financial needs.

Interest rates and fees

The first place to look is at the loan costs. Interest rates and fees are the most important factor in deciding among multiple loan offers. Pay close attention to origination fees, prepayment penalties, late fees, and any other disclosed costs.

Typical borrower profiles

Banks often cater to specific borrower profiles. Some prefer borrowers with high credit scores, while others might accommodate those with less-than-perfect credit. Understanding which bank aligns with your credit profile can increase your chances of approval and of securing better terms.

Loan sizes and payback periods offered

Consider the range of loan sizes a bank offers and its respective repayment terms. Whether you need a substantial amount for a major purchase or a smaller sum for a short-term need, be sure that the bank’s offerings align with your financial requirements and repayment capabilities.

Alternatives to bank loans

While bank loans are a common financing option, there are several alternatives that might better suit your financial situation and needs.

Avoid the expense

Sometimes the best financial move is to avoid additional debt altogether. Consider if your purchase is essential or if there are cost-effective alternatives that won’t necessitate borrowing.

Personal savings

Using personal savings for your financial needs means you avoid interest and debt. While it may require time to accumulate the necessary funds, it’s a prudent approach that keeps your finances under your control.

Credit cards

Credit cards can be a viable alternative for smaller expenses or short-term financing, especially if you qualify for a card with a 0% introductory APR. However, be mindful of high interest rates after the promotional period.

Secured loans

Secured personal loans, backed by assets such as your home or car, often have lower interest rates than unsecured personal loans. They’re a considerable option for those who can manage the risk of potentially losing the asset in case of default.

More on best banks for personal loans

Want to know more before borrowing? Here are answers to some common personal loan questions to help guide your decision.

How do bank loans work?

Bank loans provide borrowers with a specified amount of money that must be repaid with interest over a predetermined period. The repayment schedule, interest rate, and terms are agreed upon at the outset and can vary based on the borrower’s creditworthiness and the loan type.

Pros and cons of bank loans

Bank loans offer the advantage of predictable repayment schedules and potentially lower interest rates for those with good credit. However, they often require a lengthy application process, may have strict eligibility criteria, and carry the risk of accumulating debt, which can be a significant downside.

How to get a personal loan from a bank

To get a personal loan from a bank, begin by researching and comparing various banks’ loan offerings, focusing on interest rates, fees, and loan terms that fit your financial needs. Then gather necessary documentation, such as proof of income, credit history, employment verification, and any other financial documents required by the bank. Ensure that your credit score is in good standing, which significantly influences loan approval and terms. Once prepared, apply either online, in person, or over the phone, and await the bank’s decision, which may involve additional documentation and a formal credit check.

TIME Stamp: Personal loans have their place but be careful how you use them

The best bank for a personal loan depends on your individual financial circumstances, credit history, and specific borrowing needs. It’s essential to thoroughly research and compare various banks, considering factors such as interest rates, fees, loan terms, and borrower profiles. By carefully evaluating these aspects, you can make an informed decision that aligns with your financial goals and allows for a manageable repayment plan.

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