U.S. Bank Personal Loans Review: Excellent Option for Paying Off Existing Debt

U.S. Bank has been around since 1863, a big name in personal lending. Like most personal loans, the lowest interest rate is reserved for the most highly qualified borrowers, but that doesn't mean borrowers with a lower credit score should look elsewhere. Here, we'll lay out what's good (and not so good) about the lender in our U.S. Bank personal loans review.

This personal loan is a good fit for: U.S. Bank customers who want to consolidate existing debt.

Top perks

Loans as small as $1,000

If you're hit with a small emergency, like a broken water heater, a larger loan could leave you with money left over (and will need to repay). The fact you can borrow as little as $1,000 from U.S. Bank means it's possible to take out only the amount needed.

Relatively low interest rates

Interest rates vary by lender, and U.S. Bank rates hit somewhere in the middle. There are other lenders with lower interest rates on the bottom end of the range, but much higher interest rates on the upper end.

No origination or prepayment fees

Whether you're taking out a loan to consolidate debt or to remodel your kitchen, it's important to save money where you can.

Credit scores as low as 660 acceptable

Although a borrower with a credit score of 660 is likely to be offered an interest rate at the higher end of the range, it's far superior to most loans that require no credit check at all. For example, payday lenders routinely charge 400% or more for a two-week loan.

Fast funding

As long as U.S. Bank doesn't run into any bumps in the road as it processes your loan application, you are likely to receive funds within one business day.

Better Business Bureau rating of A+

Whether you're at a car dealership applying for an auto loan, at a mortgage lender applying for a mortgage, or taking out a consolidation loan, working with a well-respected lender is important.

What could be improved

Must be a U.S. Bank customer to have access to the best loan options

It is possible to become a U.S. Bank customer, but if you're not looking for a new bank, it may not be something you care to do. However, it's only U.S. Bank customers who qualify to borrow up to $50,000 and who can take care of the entire loan process online.

Lack of transparency

While U.S. Bank says that it makes loans to borrowers with credit scores as low as 660, it is unclear how the bank determines whether an applicant is qualified. Knowing in advance what U.S. Bank is looking for can help you decide whether it's worth applying.

No opportunity to prequalify

Piggybacking on the fact that U.S. Bank does not make it clear what it's looking for in a loan customer, the bank does not allow applicants to prequalify. That means U.S. Bank runs a hard credit check on each applicant, dinging their credit scores a bit in the process.

The ideal way to qualify for any loan is to put your best foot forward. The following steps will help:

• Order a copy of your credit reports from an online site like annualcreditreport.com. With one request you'll receive reports from the "Big Three" credit reporting agencies -- TransUnion, Equifax, and Experian.
• Go over each credit report carefully, looking for mistakes.
• If you find a mistake, file a dispute with the credit reporting agency in question (each agency has up to 45 days to prove the mistake is correct or remove it from your report).
• Make sure you have a credit score of at least 660.
• Gather documents so you can quickly provide the lender with anything it requests.

Application process

You can apply for a U.S. Bank personal loan online, by phone, or in person. To apply for a loan, it will be helpful to gather the following information and documents:

• Social Security number
• Recent pay stubs, or other proof of income
• Bank statements
• Photo identification
• Provide the size of loan you're applying for

If approved, you'll be asked to sign the loan agreement and let U.S. Bank know where you want funds deposited.

Before committing to any loan, compare several lenders to find the one that works best for you. For example:

With a great credit score, you are likely to have your choice of lenders. This includes LightStream, which offers some rock bottom rates. If you're borrowing money to complete a large project, LightStream offers loans up to $100,000.

If you need to borrow money but your credit score is lower than 660, Upstart is an option to consider. The lender doesn't have a specified minimum credit score.

• You're an existing U.S. Bank customer
• Your credit score is high enough to qualify for U.S. Bank's lowest interest rates
• You have an emergency and require a small loan, or you qualify for a low enough interest rate to justify consolidating higher-interest debt

Whether you work full-time, are currently unemployed, or are happily retired, the single most important thing you can do before signing for any financial product is to shop around.