Citibank Personal Loans Review: Are There Better Rates?
Are you looking for a personal loan from an established bank? Citibank offers reasonable rates on personal loans and lines of credit to their existing customers.
But are reasonable rates enough to get you to borrow? Before you apply for a loan from Citibank, be sure you understand just what you’re getting into.
Citibank offers two types of personal loans. The first is an “installment” unsecured personal loan. These are loans where you make equal monthly payments over the life of the loan (ranging from 12 to 60 months at Citibank).
Citibank also offers a custom credit line which is a type of revolving credit (like a credit card). Like a credit card, you’ll only pay interest on the custom credit line when you use the credit. Your monthly payment will depend upon the amount you’ve withdrawn and the interest rate on your line of credit. Every year, you will have to pay an annual fee of $50 to keep your personal line of credit open.
All qualified borrowers must be U.S. citizens or resident aliens living in the United States.
To qualify for a personal loan from Citibank, you need to have a banking relationship with Citibank before taking out a loan. You may also qualify for a personal loan if you have a personalized offer from Citibank.
Citibank doesn’t cite specific credit score limitations for its loans, but borrowers will typically need to have good credit to take out a personal loan or line of credit from Citibank. You’ll also need an income of at least $10,500 per year to take out the loan.
If you have more than one personal loan from Citibank open, you are not eligible for another loan.
To qualify for a Citibank custom credit line, you must have a Citibank deposit account (checking or savings) with at least $500, and you must have had the account for at least three months. If you open up the deposit account just to take out the line of credit, you must have at least three months of history paying on a Citibank credit card or mortgage. Additionally, you must meet all the previous requirements listed for personal loan borrowers.
Personal loans from Citibank have no origination fees, and are fixed-rate loans. You can borrow between $2,000 and $50,000 on a personal loan. The interest rates on the loans range from 7.99% to 17.99% APR. Repayment periods on the loans range from 12 to 60 months.
Custom credit limits come with borrowing limits ranging from $1,500 to $25,000. You must pay an annual fee of $50 to keep the credit line open. Interest rates on the custom credit lines range from 9.99% to 21.99%. Rates on this line of credit can change based on underlying changes to interest rates.
The biggest area of concern for Citibank borrowers is the penalty interest rate. Your interest rate increases by 2% APR if you fall into default on the loan.
As an interesting note for married couples, Citibank allows for joint personal loan applications. This allows borrowers to use both incomes and the better credit score to qualify for a loan. Of course, joint applications can be a double-edged sword. If one partner fails to make the payment, both will suffer from poor credit.
Citibank offers decent rates on personal loans, but it’s possible to find better rates. LightStream, SoFi, and others consistently offer lower rates for borrowers with excellent credit. Before taking out a loan, shop around for better rates.
Additionally, if you’re looking into a personal loan, it’s important to ask, “Why?” If you want to use your business loan to help you start an entrepreneurial endeavor, it could be worthwhile.
However, most borrowers should stay away from personal loans. The easy accessibility of personal loans makes it easy to overspend on consumption like weddings, vacations, boats, and more — to the detriment of your savings ability.
It’s also worth noting that almost anyone who can qualify for a Citibank personal loan could qualify for a 0% balance transfer credit card. A balance transfer credit card allows you to pay down your debt quickly with a 0% interest rate for 12 to 24 months. Before consolidating to a personal loan, take advantage of as many balance transfer options as possible.
Likewise, the custom credit line could be useful to help you start a business or cover some short-term investment opportunities, but it could also tempt you into overspending on consumer debt. Consider all debts carefully, before deciding to borrow.