Citibank Personal Loans Review | the ascent

Main advantages

Loans for as low as $2,000

It’s handy to be able to borrow as little as $2,000, especially for those who only need the funds to cover a much-needed home or car repair.

Relatively low APR

Borrowers with a good credit score can benefit from a competitive fixed rate. This is ideal for anyone looking to consolidate high interest rate debt into a single loan.

No setup fees or prepayment penalties

An origination fee is an amount added to the total amount borrowed. It is intended to cover the administrative costs associated with the loan. A prepayment penalty is sometimes charged to a borrower if he repays his loan earlier than expected. The fact that Citibank does not charge origination fees or prepayment penalties automatically saves borrowers money.

Long repayment plan

With 12, 24, 36, 48 or 60 month repayment terms, borrowers can pay more each month and withdraw the loan sooner or pay it off at a slower rate with lower monthly payments.

What could be improved

Must have a Citibank deposit account

A huge hoop to jump through is Citibank’s rule that only current account holders can apply for personal loans. Unless a borrower has held a Citibank deposit account for at least 12 months, they are not eligible to apply.

Mailed checks can take five days or more to arrive

The only way to receive funds in one day is to opt for direct deposit. Customers who prefer to receive a check can wait five or more business days from the time the loan has been approved.

No opportunity to prequalify

With most personal loans, borrowers can prequalify. They provide the lender with basic information and the lender runs a “soft” credit check that does not impact their credit rating. Once a lender has completed the due diligence, they let the borrower know if they are likely to be approved for the loan, and if so, what their APR will be. With Citibank, a borrower must complete an application and go through the entire approval process before knowing if they qualify or how much they will pay in interest on the loan. This rigorous credit check will reduce their credit score by a few points.