Applying for a Loan Online vs. In Person: What To Know

When choosing between applying for a loan online vs. in person, know that each option has its benefits and drawbacks. 

Generally, online personal loans are more accessible: They tend to be easier to qualify for, and you don’t have to make an appointment to get one. However, some people prefer the personal touch an in-person loan can provide. Read on to learn which option might be best for you. 

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What is an online personal loan? 

An online personal loan is one you can apply for and obtain online rather than in-person at a bank or credit union. 

Many online lenders have a prequalification process that lets you check your eligibility without hurting your credit score. However, you’ll need to complete the application on your own virtually (although most lenders have a customer service phone number you can call if you need assistance). 

When to apply for a personal loan online

Best for

Borrowers who need money fast, don’t mind giving out personal information online and feel comfortable with the loan process.

It can be hard choosing the best place to get a personal loan, but you might be a good candidate for an online loan if you’re: 

• Looking for an emergency loan
• Tech-savvy
• Not sure you meet the personal loan requirements for a traditional bank
• Applying for your second, third or subsequent loan

Pros and cons of applying for a loan online

Pros 

 Easier to compare lenders. Since you don’t need to drive from location to location, it’s easier to compare personal loans online than it is in person. 

 No appointment needed. Although the customer service department may not be available 24/7, you can apply for a personal loan anytime during the day or night when dealing with an online lender. 

 Tend to have looser eligibility requirements. Some online personal loan lenders are willing to look past a thin or less-than-perfect credit score and instead evaluate borrowers on a range of metrics, not just their credit score. For instance, if you’re looking for bad credit loans, the internet can be a great place to start. 

 Fast funding. Many online lenders offer quick loans, so you could see funds in your bank account within 24 hours of submitting an online loan application.

This will, of course, depend on the lender. For example, peer-to-peer lending usually takes more time than a standard online (or even in-person) loan, since you’ll need to wait for an individual investor to fund your loan. 

Cons

 May encounter predatory lenders. Most online personal loans are legitimate — unfortunately, though, you may stumble on an unscrupulous online lender. Know the signs of predatory lending and always vet the lender before providing personal information. 

 Less guidance. Most online lenders have some customer service options, but you won’t have someone guiding you through the application process like when applying for a loan at a bank. 

 Need internet access. You’ll need a stable internet connection and a computer, smartphone or tablet to apply for a loan online. 

To that matter, you’ll also need to be okay with giving out sensitive information (like your Social Security number) online. Although lenders are required to follow regulations to safeguard your information, this process can make some borrowers wary. 

What is an in-person loan? 

An in-person loan is a loan that you apply for in a brick-and-mortar bank or credit union. A bank employee or loan officer will typically walk you through your application.

When to apply for a personal loan in person

Best for

Borrowers who aren’t on a strict funding timeline, are nervous about putting their sensitive information online or are new to loans and would like in-person help.

You may want to consider an in-person loan if: 

• Your need isn’t time sensitive
• You’re worried about falling victim to an online personal loan scam
• You have excellent credit
• This is your first loan and you aren’t completely comfortable with the process

Pros and cons of applying for loan in person

Pros

 Expert guidance. If you have a question while applying for a loan in person, you’ll have a financial expert or loan officer on standby, ready to help. 

 Won’t have to input sensitive information online. No matter what, you’ll need to provide personal and financial information to get a personal loan. When you apply in person, though, you’ll either give this verbally to the loan officer as they fill out the form for you, or you’ll write in on a paper application. Banks and credit unions will safeguard your information.

 May be able to keep all your financial products with same bank. Some people find it convenient to get their personal loan from a credit union or bank they already do business with. After all, you’ll know what kind of customer service to expect, since you’re already a client (and you might get more attractive rates as an existing client, too). 

Cons

 Limited to business hours. Night owls or those who find it hard to attend appointments between 9 and 5 might have difficulty carving out time to apply for an in-person loan. 

 Might have a slower funding timeline. Banks and credit unions tend to take longer to review your loan application (but not always, especially if you’re an existing client). 

 Tend to have more stringent requirements. Banks and credit unions usually require borrowers to have a higher credit score or a more favorable debt-to-income ratio to qualify for a loan. You might also have to open an account before you can apply.