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Citibank Personal Loan: 2020 Review

| Money Rates Columnist.
min read

CitibankIf you want a personal loan from a large bank, Citibank may be right for you. (Keep in mind that three of the country's largest lenders - Bank of America, Chase and Capital One - don't offer personal loans.) This Citibank review contains the fast facts, pros and cons, and in-depth evaluation so you can confidently choose the best personal loan for your needs.

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Why Should I Apply With Citibank?

Citibank offers only its existing customers personal loans. If you're not currently one of those, you have to open a Citibank checking, savings, money market, or CD account at least six months before you apply. These loans can be good for the right borrower. But they come with drawbacks as well as advantages. Here are some key pros and cons you should know:

  • For a big bank, Citi does surprisingly well in the J.D. Power 2019 Personal Loan Satisfaction Study - It scores 2 points above the industry average on a 1,000 scale
  • Annual percentage rates (APRs) start as low as 7.99% - That's OK rather than special. And you're likely to need excellent credit to get close to that lowest rate
  • Good range of loan amounts ($2,000-$50,000) and terms (12 months-60 months)
  • Online applications available only for loans up to $30,000 - if you need more, you must visit a branch
  • No origination fees
  • No co-signers allowed

There's not much to object to in Citibank's offering. And it's ideal for existing Citi customers with high blood pressure. Because there's zero chance of your finding anything to get excited about.

How Does Citibank Work?

Citibank is one of America's bigger financial institutions, with revenues in 2019 totaling nearly $40 billion. So we're looking at a traditional bank here rather than a peer-to-peer (P2P) lender. So it's lending you its own money.

P2P lenders introduce qualified individual borrowers to individual investors. So they're more like financial dating websites than mainstream banks. In practical terms, this often means P2P lenders can be slower to fund your loan. But, in Citi's case, the advantage this should give it seems to be lost. Because there's little sign that it's willing to get its skates on.

What Kind of Loans Does Citibank Offer?

Here are the headline facts you need to know to decide whether to move forward with Citibank:

  • Loan amounts ranger from $2,000 to $50,000
  • APRs start at 7.99% and go up to 17.99% as of this writing
  • Borrow over 12, 24, 36, 48 or 60 months
  • Minimum credit score - Not published. But online forums indicate that "most" loans go to borrowers with scores of 680 or higher. Still, you could apply with a lower one because most isn't all
  • Maximum DTI* - Again, not published. You get the feeling from the rest of Citi's offering that it's likely to be midrange compared to other lenders
  • No prepayment fee - So you can pay down your loan early without penalty
  • No co-signers - You're on your own
  • As with other traditional banks, Citibank makes a hard credit check when you apply, which will slightly hurt your credit score. So you can't prequalify online in the way many P2P lenders allow
  • Variable rates
  • Lender fees - No origination fee, which is a plus compared to most P2P lenders

*DTI stands for debt-to-income ratio. It's the percentage of your pretax income that you spend for rent or mortgage plus monthly accounts like auto loans and credit cards. Utilities or living expenses don't count.

How Do I Apply With Citibank?

As mentioned earlier, you can only apply if you're an existing Citibank customer. The lender's website says:

To qualify for a Personal Loan, you must have a Citibank Checking, Savings, Money Market, or CD account with a month-end balance greater than $0 averaged over the past three months. ... You must also have an annual income of at least $10,500.

If you qualify, you can apply online for personal loans of up to $30,000. But you have to visit a branch if you want more. While Citibank has a decent network with at least one branch in more than 40 states, it is represented in more depth in some regions than others. It's particularly strong in California, Florida, Illinois, New Jersey, New York and Texas.

But, as an existing customer, you already know how easy it is for you to get to your nearest branch. Citibank provides no details about how to apply for personal loans. But it's likely to wish to verify at least your employment status, income and credit report before approving your loan. And you can save time by having documentary evidence of those (not your credit report) to hand - or with you when you visit your branch - when you apply.

How Soon Can I Get My Money With Citibank?

This lender doesn't seem in any hurry to get your money to you. It promises to pop a check in the post to you within five days of having approved your application. Considering that many of its competitors advertise same-day or next-day electronic transfers, this seems pretty poor.

So how long does it take to get your money? Too long. This leisurely approach may or may not mean that it can handle periods of peak demand more easily than it's competitors. But it's generally advisable to avoid those periods, including the holiday season, regardless of your lender, if you possibly can. One more thing: If you've recently allowed an account to slip into delinquency or have bounced a check, expect the bank to ask you why. You may want to get your story straight in your head before the question's sprung.

Citibank BBB Rating

The Better Business Bureau gives Citibank an F rating. It justifies that, its worst possible score, on the grounds the lender has failed to respond to or resolve customer complaints and has been the object of government actions.

Consumer Financial Protection Bureau and Citibank

According to federal regulator the Consumer Financial Protection Bureau, it received 34 complaints about Citibank's installment loans during 2019. The most common issue concerned problems making payment.

MoneyRates Editorial Citibank Rating

Star rating: 2.5 stars

You get the impression that Citibank has zero enthusiasm for its personal loans business. While its competitors fight to attract customers, engage with them and refine offerings to give them better experiences, Citi doesn't seem to care.

No doubt, the bank would see that as unfair. But this is by far the most critical personal loan review we delivered in an extensive series. So it's not that we're picking on those who don't deserve it.

But there are reasons for some potential borrowers to apply. It's a relatively small group of existing Citibank customers (especially those with Citigold and Citi Priority status, who may get extra discounts on interest rates) and who can get past the attitude.

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What Are the Alternatives to Citibank?

Unless you're in that small group, you probably would like some options. And, even if you are in it, you should compare personal loans offered by other lenders to make sure you get the best possible deal. Here are some that might appeal more. You can get a quote from all of them without hurting your credit score, except LightStream.

LendingClub

LendingClub allows joint applications so you can get a co-signer on board if your own credit's a bit shaky. Having said that, it accepts applications from those with scores of 600 and up. So you may not need one. It's good for consolidating debt and offers to settle with your creditors directly if you prefer not to be tempted by a lump sum in your checking account.

Payoff

This is another that's good for debt consolidation, though it specializes in credit card balance. You need fair credit but can't have a co-signer. No late fees, and online help to get you debt-free -- and keep you that way. Payoff's interest rates can be pretty good compared to similar lenders.

Best Egg

If you need cash in a hurry, Best Egg could be a good choice. It's known for getting money into borrowers' bank accounts at speed. Expect to need a credit score of 640 or higher.

Upgrade

You probably need a credit score of 640 for an Upgrade loan. But you can have a co-signer help you get there. It has a loan limit of $50,000 and often gets you your money quickly.

Prosper

This is a big lender with over a million past-and-present customers who've together borrowed $17 billion. So it's doing plenty right. And it delivers fast quotes that don't affect your credit score. So why not?

SoFi

SoFi mostly helps people with good or great credit (680 or higher). And it charges no fees (most others want you to pay for origination) and offers loans of up to $100,000. If your score's excellent, you could be in line for seriously low interest rates.

LightStream

LightStream's more like SoFi from the others. So you can get the same big loans and pay no fees. And its interest rates are exceptionally low. Just one downside: There's no prequalification process. So your credit score should take a small hit when you apply. Still, that score normally recovers (and then some) after a few months of on-time payments.

How to Find Your Best Personal Loan

Even if you're a loyal Citibank customer, you should compare personal loans from different lenders. That's because deals and interest rates vary wildly between them. And each prefers working with customers with different financial profiles. So you need to find one that likes borrowers like you.

If you're planning on making an application a few months down the line, use the time to make yourself a more attractive borrower. That typically should earn you a better deal. In particular, work on your credit score. Most lenders use ranges of credit scores to categorize applicants. So improving your score by just a point or two could push you into a higher range that gets you quotes with lower interest rates.

And finally, try to align the length of your loan with the time over which you're going to enjoy its benefits. For example, paying down a dream vacation over two years is one thing. Your memories should still be fresh when you make your last payment. But it's quite another if you're still paying for your trip five or more years on -- when you barely remember it at all.

So try to reserve long-term loans for long-term benefits: debt consolidation, perhaps, or the acquisition of something you're always going to treasure. But your overwhelming priority when choosing your loan's term is to keep your monthly payments comfortably affordable.

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