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Bank of America has an excellent reputation in the banking industry. In fact, it earned the No. 3 spot for customer satisfaction, according to the 2022 J.D. Power U.S. retail banking satisfaction study.
If you already have a checking or savings account with Bank of America, you might want to consider the bank for other financial products, like personal loans. While Bank of America offers a variety of products, like home loans, credit cards, and auto loans, it doesn’t offer personal loans.
If you need to borrow money, here are five Bank of America personal loan alternatives to consider:
5 Bank of America personal loan alternatives
It can be disappointing to find out you can’t take out a personal loan through Bank of America, especially if you trust the bank and have been a customer for a while. The good news is you can still take out a personal loan through a different financial institution. Here are five alternatives to consider:
1. Online personal loan lenders
If you need cash quickly, an online personal loan lender might be your best bet. Many online lenders let you prequalify and check your loan offers without affecting your credit. This is a great way to compare multiple rates and find the right lender for your unique needs.
Once you find a loan offer you like, you can apply for it on the lender’s website, usually within minutes. Online lenders can typically fund loans quickly. If you’re approved, you can receive your funds via direct deposit as soon as the same or next business day after you’re approved, or in a few business days.
Some online lenders require good to excellent credit, while others are more lenient and work specifically with bad credit borrowers. Some lenders look beyond your credit and consider other factors when you apply for a loan, like your income and employment situation.
2. Traditional banks
Even though Bank of America doesn’t offer personal loans, other banks do. Truist Bank and Wells Fargo are two examples of banks that offer unsecured personal loans. An unsecured loan is less risky for you because you don’t have to guarantee your loan with any form of collateral, like your home or car.
With an unsecured personal loan from a traditional bank, you may be able to borrow up to $100,000 and take two to seven years to pay it off. Loans with shorter terms tend to have a lower rate. While some banks let you apply in person at a local branch, many offer an online application to speed up the process.
In most cases, you’ll need good to excellent credit to qualify for a personal loan from a bank, which means a FICO Score of 670 or higher. You may also need to be an existing customer with another product, like a checking account or savings account. Some banks will offer loyalty discounts for being a current customer.
3. Credit unions
Credit unions differ from banks and online lenders because they’re not-for-profit, member-owned organizations. This allows them to offer lower interest rates, which could save you money over the life of your loan. But to take out a loan from a credit union, you must become a member.
While each credit union has different membership criteria, most of them extend membership to people who live in a certain area, work in a specified career, or join an associated nonprofit group. If you aren’t already a member of a credit union, check out the My Credit Union.gov locator tool to find one near you.
4. Peer-to-peer lending
If you’re struggling to get approved for a personal loan from other lenders, peer-to-peer lending services like LendingClub or Prosper are worth exploring. Peer-to-peer lending can give you access to money through individual investors rather than financial institutions like banks, credit unions, and online lenders.
While every peer-to-peer lending service is different, most of them have lenient requirements for borrowers, so you may qualify for a loan even if you have bad credit. This is because individual investors pool their funds together to issue loans and are willing to take on more risk as a result. The downside of peer-to-peer lending is that interest rates and fees may be higher than those offered by traditional lenders.
5. Secured loan lenders
Most personal loans are unsecured, meaning they’re not backed by collateral or something valuable you own. But if you don’t have the best credit, you may need to take out a secured loan, which does require collateral.
Different lenders accept different forms of collateral, like real estate, savings accounts, cars, or even your home. But if you fail to make your payments, the lender can seize your collateral.
Applying for a personal loan
If you’re interested in a personal loan, follow these five steps to apply:
- Review your credit report. When you apply for a personal loan, the lender will consider your credit to help them decide whether to approve you. That’s why it’s a good idea to visit AnnualCreditReport.com and pull free copies of your credit reports from all three major bureaus. If you find any errors or inaccuracies, dispute them with the appropriate bureau. Also, improve any issues you notice before you move forward with a loan application.
- Compare loan options and rates. There’s no shortage of personal loans on the market, making it important to shop around and explore all your options. Once you find several that pique your interest, consider their interest rates, repayment terms, fees, and eligibility requirements.
- Have necessary documentation. Most lenders will ask you to provide certain documents when you apply for a personal loan, like pay stubs, tax forms, and bank statements. Make sure you have them handy before you apply.
- Use a loan calculator. You can use Credible’s online personal loan calculator to estimate your payments. Enter the amount you want to borrow, what your interest rate may be, and the length of your ideal repayment term. Then, you’ll be able to see your estimated total monthly payments and interest payments.
- Choose a loan. Once you decide on a loan, visit the lender’s website or stop into a local branch to apply online or in person. Double check your application before you submit it to ensure it’s complete and accurate.
Kat Tretina contributed to the reporting for this article.