Bank Adviser Monthly Articles
September 2016
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The Best Place for a Personal Loan
Your local financial institution is the place to go for a personal loan

When you are looking for a personal loan, you may feel daunted by all the options you find when doing research online. Fortunately, you don�t have to sift through a large list of online lenders to find the best service, rates and value.

There is one clear winner: your local financial institution.

Here are some of the many reasons why you should stick with your local financial institution when seeking a personal loan:

They value each customer - �Start with your local community bank or credit union,� recommended NerdWallet in an article published in November 2015. �If you�ve been banking there for a while and the institution values you as a customer, you�ll get the best rate and loan amount.�

Because small financial institutions obtain their business within a limited geographic range, they place a high value on each and every customer. Large national chains have the ability to open and close branches that don�t meet peak profitability standards, so there is less need for them to be flexible to please their customers in any specific location, and each individual customer is a much smaller percentage of their overall business.

You can meet with decision-makers in person - Your local financial institution can provide something that no other lender can: the chance to speak face-to-face with someone who knows your financial situation and can work with you throughout the process. It�s much more pleasant to work with someone who knows you, instead of having to repeat the same information to whoever happens to be working at the local chain branch that day. And talking to a real person beats trying to explain yourself to an automated robotic voice over the phone or navigating email support contact forms, as one often has to do with online-exclusive lenders and large, national bank chains.

Furthermore, at a community financial institution you have the opportunity to develop a relationship with the people who make the loan decisions, and they can tell you exactly what you need to do to make your application as strong as possible because they are the ones setting the standards. If you work with a large chain, on the other hand, you may end up spending a large amount of time making your case to one person and then having your information passed on to a different person, in another location, who is higher up the chain of command.

They see more than just numbers - Fostering a relationship with your financial institution means you can seek a loan from someone who knows who you are as a person and who doesn�t have to rely on simple numbers to determine whether you should get a loan.

�Community banks may consider what type of job you have and be willing to look at your current year�s income � rather than just basing their criteria on previous earnings,� states Sandy Gadow for The Washington Post. �And since they are located in your local town or area, they are aware of certain factors that a large, out-of-state bank might not take into consideration.�

Lastly, because they are part of the community, small financial institutions are frequently active in local charities and other organizations, so you can feel good about providing them with your business.

�When you make payments to a nearby [financial institution], there�s a good chance it will take that money and lend it to other individuals and businesses in the area,� states Daniel Kurt, a contributor to Investopedia. �Smaller [financial institutions] also tend to support local events and charities, thus bolstering the local community.�

If you want to find the best rate on a loan, get the best customer service, feel valued as a person and support an organization that gives back to the community, you know where to go: your local financial institution.


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