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Washington, D.C.

Best Loan companies of July 2021 in the United States

There is a variety of options for getting a loan but an applicant should follow several steps from checking credit history to passing the process of the loan approval.

Best for Personal loans for credit card consolidation
  • Est. APR 4.49 - 20.49%
  • Loan Amount $5,000 - $100,000
  • Min. Credit Score - 660
Best for Personal loans for short credit history
  • Est. APR 6.46 - 35.99%
  • Loan Amount $1,000 - $50,000
  • Min. Credit Score - 580
Best for Bank loans
  • Est. APR 6.99 - 19.99%
  • Loan Amount $3,500 - $40,000
  • Min. Credit Score - 660
Best for Personal loans for good to excellent credit
  • Est. APR 5.99 - 18.85%
  • Loan Amount $5,000 - $100,000
  • Min. Credit Score - 680
Best for Debt consolidation loans
  • Est. APR 6.99 - 24.99%
  • Loan Amount $2,500 - $35,000
  • Min. Credit Score - 720

Other types of loans

Wiki - useful articles

Interesting facts in articles from the financial community.

9 main categories of financial companies

Nowadays financial institutions offer a broad spectrum of credit, deposit and investment options to individuals and businesses. While some companies are aimed to provide services and report to general public, others work only with specific categories of customers. The list of provided services depends on preferences of clients.

To realize what financial company is the most suitable to meet your specific needs, it is essential to understand the difference between their types as well as purposes.

Below is the list of the major types of financial companies.

Central Banks

These financial institutions manage the financial system and supervise all other banks. The Federal Reserve Bank is such a bank in the United States and it conducts the monetary policy, supervises and regulates other financial companies.

The Federal Reserve Bank does not have direct contact with individual consumers. Instead, it cooperates directly with large monetary institutions providing services as well as products to the public.

Commercial and retail banks

Normally commercial banks cooperate with businesses while retail ones offer services to individuals. Nowadays deposit accounts, financing and limited financial advice are offered by many large banks for both groups.

Note! These banks provide savings and current accounts, personal and home loans, certificates of deposit (CDs), bank accounts for businesses and credit cards.

Internet banks

Relatively recently these banks have become a powerful player in the market and their business model is similar to that one retail banks apply. The United States is one of the first countries where the introduction of Internet banks has begun quite actively.

Products and services are the same as of regular banks but Internet ones implement all operations via online platforms and not through regular financial offices.

Savings and loan associations

These monetary institutions can work with both individuals and businesses. In the event the credits volume provided to companies does not exceed 20% percent of the issued loans total volume such companies will be classified as savings and loan associations. Individuals apply to such companies in order to set up a deposit account, get a personal or home loan.

Credit unions

Their aim is to serve a specific customers group like military personnel, teachers, etc. Although retail banks have similar products on offer, credit unions are owned and operated by members.

Investment banks

These banks don't accept deposits. Instead, they provide assistance to private consumers and companies in issuing securities. Investment companies bundle funds from private and corporate investors and allow them access to the market of broader securities.

Brokerage firms

Clients of brokerage firms are individuals and legal entities that want to acquire ownership of bonds, shares, and other securities. With the help of these firms customers can buy and sell securities from available investors. They are also able to place trades in bonds, stocks, exchange traded funds, mutual funds and some other alternative investments. Such firms act as intermediaries that facilitate such transactions.

Insurance companies

These are the companies enabling individuals to pass the risks of funds loss. Insurance companies are classified as financial institutions in the United States. They offer clients the possibility to take advantage of insurance products designed to protect funds in the event of adverse circumstances such as disability, death, property damage, accidents as well as other emergencies.

Mortgage companies

They finance home loans. Mortgage companies are divided into 2 groups:

  • provide services for individuals
  • finance only commercial property

But some companies simultaneously issue real estate loans to the both groups.

Banks compared to credit unions

When thinking of setting up a financial account, customers should carefully analyze all conditions.

Important! Nowadays, CUs and banks are rather similar in terms of convenience and quality especially if the considered credit union provides proper online services and is a cooperative's member that allows access to ATMs and offices across the whole country.

Banks along with credit unions propose funds of the same security level thanks to the insurance propped up by the Federal government.

When reviewing these financial institutions, it is worth realizing what features are the most essential for you. For example, a variety of ATM machines or the lowest charges on a current account. Below are key differences that can help make the choice easier:

Proprietary right

Banks act as commercial companies and are owned by investors while credit unions are nonprofitable companies owned by members. The main aim of banks is to make profits to the investors. For credit unions it is not necessary. Instead, the goal is to keep charges on a low level, rates of interest on savings as high as possible and percentage rates on credits at the lowest possible level.

Membership

A bank account can be open by any person. A customer base of a credit union has to be limited by its “membership field”. This could be a definite company, a school, a geographic area, etc.

Various schemes are applied by national unions in order to increase eligibility. For instance, some grant membership through their association which can be joined for a fairly low fee.

CU members are also given the opportunity to vote for the credit union's policy as well as participate in decision-making while bank clients are not granted such a possibility even if significant contributions have been made.

Percentage rates

While checking various loan types, it is always better to check both types of monetary institutions. In many cases, the lowest percentage rates on such loans as auto and real estate ones are provided by credit unions. When it comes to rates on savings products credit unions are likely to provide rates of a higher level than banks typically do. Online banks are also better to be checked out as they generally offer rather low rates that can be suitable.

Fees and commissions

Banks tend to claim higher charges rather than credit unions as they have to make profits to their investors. Current accounts of most CUs can be maintained without a monthly service fee and they don't require a minimum balance as well. At the meantime, banks add to their free current accounts some conditions like the minimum balance or else requirements for other account types (like credit cards and home credits). Charges for returned cheques or overdrafts are also typically higher at banks, especially if a client is not eligible for a premium account. While searching customers should consider and compare both online and regular banks.

Products offered

Credit products volume depends directly on the financial institution size. Thus, banks generally offer more products compared to credit unions, especially in commercial banking like credit cards and loans for businesses. The same can be mentioned regarding investment products. Credit unions are smaller than banks and just are not able to compete with them in this issue.

Online services and technologies

Large banks generally spend significant funds on technology and as a result, they are able to add tech services much faster than credit unions. That is the main reason why mobile services provided by banks are more developed. But anyway, some national credit unions' options of digital banking have most services that customers need.

Attention! In case well developed technology and online banking are key factors for an applicant then the choice is definitely for a bank.

Anyway it is better to make a list of essential services and study different options proposed by both monetary institutions prior to opening an account.

Funds keeping

CUs and banks insure funds for the amount to $250,000. The Federal Deposit Insurance Corporation insure banks while the National Credit Union Administration provides safety measures for credit unions.

In case a customer wants to deposit the sum over $250,000 then it is better to contact directly the customer service department of the chosen institution and check the best account types for protecting funds from loss.

Support service

Surprisingly, large banks may provide poor customer service due to a large number of clients and generally the rules are not locally set.

On the contrary, credit unions strive to serve members and tend to be very flexible regarding their customer needs. CU account holders have equal rights for voting and thus, can influence on the quality customer service.

In addition, credit union members can deal with local branches and it helps to facilitate relationships with branch managers and employees responsible for issuing credits. So, it may be easier for applicants to obtain the loan needed. Of course, some banks are consumer-oriented too and this allows to get proper service at a local bank office.

Important! The rules of interaction with members in CUs are set by members themselves while in banks by managers and investors.

Location

Large banks usually have more direct customer service locations and credit unions typically operate in smaller localities and have fewer branches. In order to minimize this shortfall credit unions have established the network of over 5,600 branch offices throughout the USA.

Credit unions are likely to offer profitable percentage rates and cheaper services for both credits and deposits. Banks typically render more products and services together with numerous online services. All the abovementioned factors should be considered when choosing the most suitable institution.