Where to Get a Personal Loan: Banks, Credit Unions, and Online

Personal loans are available from three main sources: banks, credit unions, and online lenders. Each one comes with different rates, approval requirements, and funding timelines.

The average personal loan interest rate sits at about 12.26% as of early 2026, but your actual rate will depend on your credit score, the lender you choose, and your loan terms. Banks currently average around 12.06%, credit unions around 10.72%, and online lenders range from roughly 6.49% to 35.99%.

This guide walks through where to get a personal loan, what each lender type offers, and how to pick the right one for your financial situation.

Banks are one of the most common places to get a personal loan, and they tend to work best for borrowers with good to excellent credit (FICO scores of 670 or higher).

Most major banks offer personal loans ranging from $1,000 to $100,000, with APRs typically between 6.49% and 25.49% depending on the bank and your creditworthiness. Some of the top banks for personal loans include:

• U.S. Bank offers rates from 6.49% to 17.99% on loans from $1,000 to $50,000, with same-day funding for existing customers
• TD Bank offers rates from 6.99% to 18.99% on loans from $2,000 to $50,000
• Wells Fargo offers rates from 7.49% to 24.49% on loans from $3,000 to $100,000
• LightStream by Truist offers rates from 7.49% to 25.49% on loans from $5,000 to $100,000 for borrowers with excellent credit

One major advantage of banks is the in-person experience. You can sit down with a loan officer, ask questions, and walk through the application together. Many banks also offer rate discounts of 0.25% to 0.50% if you set up autopay or already have a checking account with them.

The downsides? Banks typically have stricter lending criteria, and the application-to-funding process can take anywhere from a few days to a couple of weeks. If your credit score is below 670, you may have a harder time getting approved, or you could face higher rates.

Credit unions are not-for-profit financial institutions, and that structure translates directly into lower rates for borrowers. Because they return profits to their members rather than shareholders, credit unions often beat banks on both interest rates and fees.

Federally chartered credit unions cap their APRs at 18%, which is a significant advantage for borrowers with fair or poor credit who might otherwise face rates in the 25% to 36% range elsewhere.

Here is what makes credit unions stand out:

• Lower rates on average (around 10.72% compared to 12.06% at banks)
• More willing to work with borrowers who have lower credit scores
• Smaller loan amounts available (some start at just $500)
• More personalized service and flexible underwriting

The catch is membership. You need to join a credit union before you can apply for a loan, and membership is usually based on your employer, location, or other affiliations. That said, many credit unions have broad eligibility requirements, so finding one you can join is usually not difficult.

First Tech Federal Credit Union (which merged with Digital Federal Credit Union in early 2026) is one example of a large credit union that serves employees at over 1,700 companies, including Amazon and Microsoft.

Online lenders have become the fastest-growing segment of the personal loan market. They operate entirely digitally, which means lower overhead costs and, in many cases, faster approval and funding.

Some online lenders can fund your loan within 24 hours of approval, and a few even offer same-day funding. The application process is typically straightforward: fill out an online form, upload your documents, and get a decision within minutes.

Online lenders also tend to have the widest range of credit requirements. Some cater specifically to borrowers with excellent credit and offer rates as low as 6.49%, while others specialize in bad credit loans and accept scores as low as 300.

Popular online lenders include:

• SoFi for borrowers with good credit who want no-fee loans
• Upstart for younger borrowers with limited credit history (uses AI-based underwriting)
• OneMain Financial for borrowers with poor credit who need secured loan options
• LendingClub for borrowers who want flexible terms and competitive rates

The main risk with online lenders is the variation in quality. You need to verify that the lender is legitimate, check for hidden fees (origination fees can run 1% to 10% of the loan amount), and read the fine print on repayment terms. Stick with established lenders and check their reviews before applying.

Each lender sets its own eligibility criteria, but most personal loan applications require the following:

• Credit score: Most lenders prefer a FICO score of 580 or above. The best rates go to borrowers with scores of 740+. Some online lenders accept scores as low as 300, but you will pay significantly higher interest.
• Income verification: Lenders want to see stable income. This usually means providing pay stubs, tax returns, or bank statements. Many lenders set minimum annual income requirements, though these vary.
• Debt-to-income ratio (DTI): Most lenders look for a DTI ratio no higher than 36% to 43%. This ratio compares your monthly debt payments to your gross monthly income.
• Employment history: Steady employment for at least two years is preferred, though some lenders are more flexible with gig workers and freelancers.
• Identification and banking information: You will need a valid ID, Social Security number, and an active bank account for fund disbursement.

The application process is fairly consistent across lender types, though the timeline varies.

Step 1: Check your credit score. Before you apply anywhere, know where you stand. Your credit score determines which lenders you qualify for and what rate you will get. You can check your score for free through your bank, credit card issuer, or a service like Credit Karma.

Step 2: Prequalify with multiple lenders. Most lenders offer prequalification, which lets you see estimated rates and terms without affecting your credit score (it uses a soft credit pull). Compare at least three to five lenders before committing.

Step 3: Gather your documents. Have your proof of income, ID, Social Security number, and bank statements ready. Having everything prepared speeds up the process.

Step 4: Submit your application. Once you choose a lender, complete the full application. This triggers a hard credit inquiry, which may temporarily lower your credit score by a few points.

Step 5: Review your loan offer. If approved, carefully review the loan terms, including the APR, monthly payment, loan term, and any fees. Pay special attention to origination fees and prepayment penalties.

Step 6: Accept and receive funds. Sign your loan agreement and wait for the funds to hit your bank account. Depending on the lender, this can happen the same day or take up to a week.

The right lender depends on your credit profile, how much you need, and how quickly you need it.

If you have excellent credit (740+): Start with your bank, especially if you already have accounts there. Many banks offer loyalty discounts that can bring your rate down by 0.25% to 0.50%. LightStream and SoFi are also strong options with no origination fees.

If you have good credit (670-739): You have the most options. Compare banks, credit unions, and online lenders. A credit union could save you money on interest since their rates tend to be lower across the board.

If you have fair credit (580-669): Credit unions are often your best bet here, thanks to the 18% APR cap on federally chartered institutions. Online lenders like Upstart that use alternative underwriting data can also be competitive.

If you have poor credit (below 580): Online lenders specializing in bad credit loans will be your most accessible option. Expect higher rates (often 25% to 36%), and consider whether a secured loan or a co-signer could help you qualify for better terms.

If you need money fast: Online lenders are the clear winner for speed. Many can fund your loan within one business day. Some banks like U.S. Bank also offer same-day funding for existing customers.

A personal loan is not always the best tool for every borrowing need. Depending on your situation, one of these alternatives might save you money or be easier to access.

0% APR credit cards. If you need a smaller amount (under $5,000 or so) and can pay it back within 12 to 21 months, a credit card with a 0% introductory APR can be cheaper than any loan. You will pay no interest during the promotional period. Just make sure you pay off the balance before the regular APR kicks in, which is typically 18% to 29%.

Home equity loans and HELOCs. If you own a home and have built up equity, a home equity loan or HELOC can offer rates significantly lower than personal loans (often 7% to 9%). The tradeoff is that your home serves as collateral, so defaulting puts your property at risk.

401(k) loans. Some employer-sponsored 401(k) plans allow you to borrow against your retirement savings. You are essentially borrowing from yourself, so there is no credit check and the interest you pay goes back into your account. But this should be a last resort. You miss out on market returns while the money is out, and if you leave your job, the loan may be due in full within 60 days.

Debt consolidation loans. If your primary goal is combining multiple debts into one payment, a dedicated debt consolidation loan may offer better terms and a more structured repayment plan than a general personal loan.

Personal lines of credit. Unlike a loan that gives you a lump sum, a line of credit lets you draw funds as needed up to a set limit. You only pay interest on what you borrow. This works well for ongoing expenses or projects with uncertain costs.