Applying as unprepared Sophomore: potential downsides?

Hi all,
I'm a rising sophomore who just transferred into a top target business school. I have a slightly BS internship this summer and a very high GPA. However I have not taken any relevant coursework, don't understand a lot of the technicals, and overall don't really feel prepared for this process at all or have any kind of network. I'm not prepared for technicals or behaviorals, and I'm pretty sure I'd bomb a hirevue. I'm just wondering: if I apply to a bunch of sophomore programs at all the big banks and get rejected and make a complete fool of myself in interviews, will it hurt me in the future? Would I be better off trying to intern with a local PE firm or boutique Investment bank? I mean and just not taking a shot at BB's, I'm trying to find one of those regardless. If there's a potential downside to applying I really don't want to, especially because the odds are so long as non-diversity. If I shouldn't apply to BB's does anyone have any advice about getting a local type internship in a decent size (think Atlanta, Nashville Charlotte etc.) city? Really appreciate any help, sorry if this is a bit rambling I'm not sure where to start with all this.