If you're in a financial strait and you can't figure out how to make it to next month, getting a new credit card may help, or you may choose to seek a personal loan with no collateral. Also called signature loans (as opposed to a loan with collateral, which is called a mortgage), these are loans that your creditor offers to you on the basis of simply trusting you to pay it back, since there's nothing to confiscate if you don't. Because of this, the loan is a higher risk for the lender, so you can expect to get higher interest rates. One way to counter this is by seeking a loan from a bank that you have an established account with. Here are the pros and cons of seeking a loan from your own bank.


Since you have a long-standing relationship with your bank, they know how responsible you are. If you've never let your account go into overdraft, never bounced a check, and always paid your account fees, your bank probably looks on you as a good bet for a loan. This may inform their decision when offering you loan terms, and it may even persuade them to overlook a low credit score, especially if you have a good explanation for how your credit score came to be so low. Since your chances of getting the loan you need at the rates you need are best at a bank or credit union that you have a good relationship with, starting here can help reduce the likelihood of getting multiple credit inquiries from multiple institutions, which can harm your credit score. It's also a good idea to start here because you know that your bank is a reputable lending institution and you probably know whether they tend to give good rates or not or at least can guess based on how they treat their checking account customers. 


One caveat is that if you're not sure you'll be able to pay back the loan, you shouldn't get one from your own bank. (Of course, it's a bad idea to get a loan you won't be able to pay back anyway, since it will mess up your credit history and credit score if it goes into collections.) You don't want to mess up a good banking relationship, especially one that you've spent many years building.

These pros and cons will help you see whether it's best to apply for a loan from your bank first before seeking out signature loans elsewhere.