Key Takeaways
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Completing a loan application online can be faster and provides quicker access to cash.
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In-person applications require a meeting with a loan officer at a bank or credit union, and the process may take longer.
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Each option has pros and cons that vary based on your needs and preferences.
There is no one-size-fits-all answer to the question of whether applying for a loan online rather than in person is better.
Most personal loan lenders now offer online application, even banks and credit unions. Applying online is often faster and more convenient. However, personal assistance can help you better navigate the process and make it easier to take advantage of potential benefits for existing customers.
Online versus personal loans
Can you get a loan online without talking to anyone? Nowadays it is very possible.
Banks, credit unions and online lenders offer personal loans online. These loans allow borrowers to apply through the institution’s website instead of speaking to a loan officer at a physical location.
You also submit the necessary documents electronically.
In-person application processes require you to apply by meeting with a bank or credit union officer. Today, however, most banks and credit unions also offer online applications for personal loans.
How to sign up depends on available options and personal preference. It’s important to be fully aware of the details of both processes to ensure you get the best loan for your needs and credit situation.
When should you apply for a personal loan online?
Online applications are often more streamlined, simple and efficient processes. Here’s when they can be a good choice:
- If you are comfortable with technology: Applying through an online portal can save you time if you don’t mind using online submission platforms and are comfortable using a computer to provide personal information.
- If you need money quickly: The fastest emergency loans have online applications. They use software to quickly review your submitted information. Online lenders can approve applications in minutes and disburse funds the same day.
- You do not have an existing banking relationship: Having a relationship with a bank can sometimes give you access to better loan rates and terms. But if you don’t already have this type of relationship, you can find more competitive loan offers online.
Always make sure the site you are applying to is secure. You can look at the URL: the first few letters should be ‘https’, not just ‘http’.
Before you start an application, check with your bank to see if any benefits are available for personal customers. It may offer an interest rate reduction or a grace period for the payment date. This can save you money in the long run.
When should you apply for a personal loan in person?
In some cases, applying for a loan in person may be the best choice. This may be true if:
- You prefer individualized help: If you like face-to-face customer service and live near a lender, applying for a loan in person may be a good choice.
- You have unusual circumstances: Sometimes your income, assets or reasons for needing a loan are complicated in ways that are difficult to explain in an application form. You may find it easy to explain in person where you can answer follow-up questions directly.
- You are a first-time applicant: If you’ve never applied for a personal loan before and are feeling overwhelmed by the process, an in-person application can reduce the stress. The credit advisor will guide you through the process. However, some online lenders (such as ) also promise individualized help.
- You don’t want to share information online: Not everyone feels comfortable uploading their personal and financial information online. If this is the case, applying for a loan in person may be a better choice.
It’s still important to compare personal loan interest rates with other institutions to ensure you’re getting the most competitive rate for your credit situation. If you apply in person, you can ask the officer directly about any rate discounts or perks.
Advantages and disadvantages of applying online
Here are the most important factors to consider before applying for a personal loan from a bank, credit union or lender through the online application portal.
Positives
- Prequalification: Borrowers can see their potential rates and approval odds without impacting their credit by pre-qualifying. Prequalification also makes it easier to search through lenders and find the most competitive offer.
- Faster financing: Most online applications are marketed as having a simple process and fast funding times, and some offer payout within one to two business days of approval.
- More flexible criteria: Brick-and-mortar lenders typically have stricter minimum requirements than online lenders.
Disadvantages
- Limited help: If you apply online outside of a lender’s customer service hours, you may have to wait for help if you get stuck. And even then, you may end up using a useless chatbot or navigating a phone tree.
- Must submit information online: Although lenders must provide a secure online portal, some borrowers may be hesitant to submit sensitive information, such as their Social Security number, online.
- Easier to make a mistake: Completing the application online leaves more room for errors in the process. For example, it is easier to make a typo when filling out your personal information online than when you have a loan officer review your application in person.
Advantages and disadvantages of applying in person
Here’s what you need to know before applying for a personal loan at a brick-and-mortar location.
Positives
- Personalized help: The main benefit of applying for a loan in person is the individualized assistance. From application to origination, you’ll work with a loan officer to ensure the process is smooth and error-free.
- Member benefits and benefits: Some institutions offer benefits to borrowers who have banked with them before. Attending in person will make it easier to find.
- Establishes a relationship: By applying in person, you can build a relationship with a loan officer at your bank. This relationship can make the application process easier later if you need to borrow from the institution again.
Disadvantages
- Awkward process: Some may find it inconvenient to have to be physically in the physical location, especially if it is not a convenient location or is far away.
- Prequalification is not that common: Most online lenders allow borrowers to pre-qualify, making it easier to compare potential offers. However, not every bank or credit union has this option. Even if it does, it’s not as convenient as pre-qualifying online and comparing offers can be more difficult.
- Slower approval process: Depending on the institution, an in-person application may lead to slower funding times. This is especially true if you have to complete the application on paper instead of online.
The bottom line
Online loan applications are common and offer many benefits. For example, the financing process is often faster.
But this option may not be suitable for everyone. Let’s say you prefer personal, face-to-face customer service or have an existing relationship with a bank. In that case, it may be possible to obtain a more competitive loan through a personal application.
Whether you apply for a loan online or in person, it’s important to shop around and compare multiple offers to ensure you get the most competitive loan offer.
Frequently asked questions
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What is considered “easier” depends on your needs. Although online is usually faster and does not require travel, in-person assistance provides more face-to-face assistance with the application, reducing the chance of errors.
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Normally, applying for a loan in person is much slower than applying online. Online applications are often faster and many lenders or banks will send you the money within one to two business days of approval. If the in-person application is completed on paper, it must be processed and that step alone can take up to a week.
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You can safely apply for a personal loan online from a reliable online lender or bank. Generally, the online application portals are encrypted and your data is safe and used only for that application. Protect your information by making sure the lender is credible and not predatory or scamming.
