Community banks are dedicated to serving the local people and businesses of their communities and hold a strong appeal for consumers tired of the impersonal treatment of big banks.
As the market for personal loans has heated up, an increasing number of community banks have started to offer them.
Your chance of obtaining a competitively priced personal loan from a community bank increases when you have a banking relationship with one.
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Personal Loans Offered by Community Banks
While most of the best personal loan companies are national lenders and banks, some community banks do have good offerings. Here’s a sampling of some community banks from around the country and their personal loan offerings.
1st Colonial Community Bank
With just two branches in and around Collingswood, New Jersey, 1st Colonial Community Bank is definitely local. Its best rate on an unsecured loan is currently 8.50 percent. Loan decisions are made quickly in the branch.
Union Community Bank
Serving Lancaster County, Pennsylvania, Union Community Bank has 14 branches. It is part of the AllPoint ATM network with more than 48,000 surcharge-free ATM locations nationwide.
Central Valley Community Bank
Starting out as a single branch in Clovis, California, Central Valley Community Bank serves the greater Fresno area. While it doesn’t offer any personal loans, it does offer an unsecured personal line of credit for amounts of $500 to $35,000.
As you can see, you never know what you’ll find at your local community bank. The one thing these four banks have in common is that none of them offer online applications. Loan applications must be submitted in the branch.
Community Bank Pros
More Flexible Lending Guidelines
When you apply for a loan with a traditional bank your application is sent up the ladder to some faceless underwriter in the corporate office. That underwriter, who doesn’t know you, must adhere to strict guidelines, making it difficult for customers with a blemish or two on their credit report to qualify for a low loan rate.
Community banks make all lending decisions on a local level, taking into consideration the unique needs and circumstances of their customers. Some community banks go beyond the application to consider your character, family history, and your relationship with the community.
Lower Fees and Better Rates
Very often community banks charge lower fees on banking products than the big banks. Typically, checking accounts from community banks are less expensive than those from national banks.
On top of that, the checking accounts at community banks usually come with more features. If you’re looking for an edge with your savings, the interest rates at community banks are also usually higher than the big banks.
Better Customer Service
The big banks have set a low bar when it comes to customer service, which is one of the biggest reasons consumers are leaving them.
At a community bank you are more likely to be treated as more than just an account number. Service is more personalized and typically much faster. If you apply for a loan they take the time to know you as a person rather than just a credit score.
Community Bank Cons
A Little Behind on Technology
Community banks have historically been slow to adapt to technology. They just don’t have the IT budgets that the big banks have.
As far as their back office systems and processes they are up to speed with electronic transfers and Automated Clearing House, but they may be a bit behind when it comes to online and mobile banking.
While many more are offering it, they may not be quite as robust as what you would find with a big bank.
Limited Financial Products
With a community bank you might not get everything you need. Most community banks offer checking and savings account options, but they may be somewhat limited in other financial products such as retirement accounts.
Many community banks have just a few branches in the local area. If you need access to a branch away from home, you’re out of luck. Many community banks do belong to large ATM networks which allow you access to your cash without paying a fee.
Author: Jeff Gitlen
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