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Best Bank for Personal Loans in Texas for 2021

Find out which banks and lenders offer the best personal loans in Texas based on interest rates, borrowing limits, and fees - compared to online personal loans.

What makes personal loans so useful and popular is their flexibility.

You can apply for a personal loan for almost any reason and there is no collateral requirement.

Simply apply for a loan, specify the amount you need, and if you’re approved, you’ll receive the money.

If you live in Texas and need a personal loan, these are some of the best lenders that you can use.

The Biggest Lenders in Texas

The biggest lenders in Texas that offer personal loans are:

  • Wells Fargo
  • BBVA
  • Frost Bank
  • Texas Capital Bank
  • Zions Bank
  • Comerica Bank
  • PlainsCapital Bank
  • Independent Bank
  • LegacyTexas Bank
  • BB&T

Not all of these banks offer personal loans, but many do. The list contains a mixture of larger, national banks and more local ones.

Local Texas Lenders

If you’re looking to work with a local lender, we recommend one of the following options:

  • BBVA
  • Wells Fargo
  • ZionsBank

Local lenders are a good choice for many people because they are often more able to be flexible and offer more personalization than national banks.

The strength of larger banks is that they tend to have more streamlined lending processes.

BBVA

BBVA offers a great personal loan that will meet the needs of most people.

The catch:

You can only apply for a loan from BBVA if you’ve received an invitation.

If you’ve received an invitation to apply, you can apply by visiting a branch, going to the bank’s website, or over the phone.

Loans terms range from 12 to 72 months and you can borrow up to $100,000 at very reasonable rates. Online loan applications have a limit of $35,000.

BBVA is a particularly good choice for people who need cash fast. The bank offers same-day funding for qualifying customers with a BBVA checking account.

Wells Fargo

Wells Fargo is a national bank chain, but it offers decent personal loans that are worth considering.

You can apply for a loan online, over the phone or in a branch. Loans can range from $3,000 to $100,000 with terms of 12 to 60 months.

If you already bank with Wells Fargo, you should consider using the bank for your personal loans too.

You can get a relationship discount if you sign up for automatic payments and receive your money as quickly as one day after you apply.

Zions Bank

Zions Bank is a good choice for people who only need to borrow a small amount of money.

Zions Bank’s minimum loan is just $2,500, which puts it below the minimums of the other banks on this list.

Other than that, ZionsBanks loans are relatively standard, with average rates and the usual choice of terms.

Can Online Lenders Be a Good Alternative?

Visiting a branch of your local bank to apply for a loan is pretty easy to do, but you should also take the time to consider whether there are other, better lenders to work with.

One type of lender worth considering is online lenders.

Online lenders tend to offer lower fees and interest rates than traditional banks.

Even better:

Some online lenders take a different approach, using non-traditional factors to determine whether to approve you for a loan.

For example, an online lender may consider your job history and level and area of education, which might help you get approved if you have poor credit.

Things to Look at When Comparing Loans

Once you’ve decided that you need a personal loan, the next step is to decide which lender you should work with. 

The first step in this process is determining which lenders will give you a chance and approve you for a loan. Some lenders will only work with people who have stellar credit. Others have looser requirements. Which you want to work with will depend on your credit report.

Once you’ve put together a list of a few lenders, you should compare the details of the loans they offer. These are the most important factors to compare.

Fees

Many personal lenders charge fees on their loans. They can be painful but are sometimes necessary.

One common type of fee is the origination fee. This fee is usually a percentage of the amount that you borrow and is tacked onto the balance of your loan.

For example, if you borrow $10,000 and pay a 3% origination fee, the starting balance of your loan will be $10,300, even though you only receive $10,000 to your bank account.

Most lenders also charge late payment fees, which are incurred if you miss a payment. Some also charge early repayment fees, which are charged if you pay the loan off ahead of schedule, helping the lender make up for lost interest income.

If you have the chance, you should go for a loan with few or no fees.

Borrowing term

The term of a loan is the amount of time that you will pay it off if you follow the prescribed minimum payment schedule.

For example, if you open a loan with a 60-month term in January of 2020, you’ll pay the loan off in January of 2025 if you make just the minimum monthly payments.

  • Longer terms translate to lower monthly payments, but higher total costs for the loan.
  • Shorter terms make the loan cheaper but result in higher monthly payments.

Try to strike a balance between a manageable payment and low costs.

Lending limits

Why would you bother applying for a loan if the lender won’t give you the amount of money that you need? 

Some lenders have low lending limits while others will let you borrow $100,000 or more.

So:

Make sure that the lender that you want to work with offers loans of the amount that you need.

Fund disbursement period

Sometimes, you need cash and you need it now.

Some lenders specialize in getting the money in your hands within 24 hours. Others can take a week or more to disburse the funds.

Depending on the situation, you might need to prioritize a quick lender over the others.

Relationship discounts

If your current bank offers personal loans, see if the bank offers any relationship perks or discounts.

Many banks will give existing customers an interest rate discount or other benefits if you open your loan with them.

Usually:

The rate discount requires that you set up automatic payments from a checking account at the same bank.

What Do You Need to Apply for a Personal Loan?

When you apply for a personal loan, you’ll need to provide some information to the lender.

This information will be used to verify your identity and determine whether you’ll be able to make the monthly payments.

Expect to provide some or all of the following information:

  • Name
  • Address
  • Date of birth
  • Proof of identity, such as a driver’s license
  • Social Security number
  • Annual income
  • Proof of income, such as bank statements or paystubs.
  • Verification of employment

Though providing this much information might sound daunting, the more info you provide, the better.

The more information you can give to the bank, the better your odds of being approved for a loan.

Also, banks that ask for more information will vet their borrowers more accurately, allowing them to charge lower interest rates because fewer customers will default.

How to Improve Your Chances of Being Approved for a Personal Loan

There are a few different ways that you can improve your chances of being approved for a personal loan.

Boost your credit

The most obvious is to improve your credit score. Higher scores have a higher chance of getting approved.

The best way to improve your score is to make timely payments on all of your bills over the course of years.

This isn’t great short-term advice, but there are a few tricks to give your chances of approval a quick boost.

One trick is to reduce your credit utilization ratio.

This is the ratio of the amount that you’re borrowing with your credit cards to the total credit limit of all your cards. Pay down your card balances and don’t add new purchases for a month or two to reduce this ratio.

Raise your debt-to-income ratio

You can also improve your debt-to-income ratio, though this can be hard to do.

Paying down your debts is one way to reduce this ratio. It will also boost other factors of your credit, giving your score a boost too.

Increasing your income will also improve your debt-to-income ratio. Just remember that the income needs a paper trail to be counted. Lenders won’t consider under-the-table income in your application.

Finally, make sure that you’re applying for your loan for the right reason.

Lenders might be more willing to approve a loan for someone that is consolidating their debts than someone who already has debt and wants to fund a luxury vacation.