Applying for a loan online vs. in person: Which is better?
Key takeaways
- Completing a loan application online can be quicker and provide access to cash more rapidly.
- In-person applications require meeting with a loan officer at a bank or credit union and the process can take longer.
- Before applying for a loan online or in person, be sure to compare interest rates from multiple lenders and make sure you are not using a predatory lender.
Applying for a personal loan in person isn’t your only option. Most lenders, including banks and credit unions, now offer an online application. However, there isn’t a one-size-fits-all answer to whether applying for a loan online vs. in-person is better. While applying online is often faster and more convenient, in-person assistance can help you better navigate the process and make it easier to take advantage of potential perks for existing customers.
Online vs. in-person loans
If you prefer more personalized service, a traditional in-person loan could be the best option for you, but those who are too busy to make it to the bank or do not have a branch nearby may prefer the convenience of an online loan.
In addition to in-person loans, banks, credit unions and online lenders all offer online personal loans. These loans allow borrowers to submit an application through the institution’s website rather than talking to a loan officer at a brick-and-mortar location. You will submit the required documents electronically, too.
In-person application processes require you to apply by meeting with a bank or credit union loan officer. However, today, most banks and credit unions also offer personal loan applications online.
When deciding whether to apply for a loan in person or online, consider the available options and your personal preference. It’s important to be fully informed about the details of both processes to ensure you’re getting the best loan for your needs and credit situation.
When to apply for a personal loan online
Online applications often offer more streamlined, simple and efficient processes. They may be a good choice if:
- You’re comfortable with technology: Applying through an online portal may save you time if you don’t mind using online submission platforms and are comfortable using a computer to provide personal information.
- You need funds quickly: The fastest emergency loans have online applications. They use software to review your submitted information quickly. In most cases, it doesn’t take long to have your funds approved; online lenders may approve applications within minutes and disburse funds as soon as the same day.
- You don’t have an existing bank relationship: Having a relationship with a bank can sometimes give you access to better loan rates and terms. But if you don’t have this type of relationship already established, you may find more competitive loan offers online.
Before starting an application, check with your bank to see if any benefits are available to in-person customers. It might offer an interest rate reduction or a payment date grace period. This can save you money in the long run.
Always make sure the site you apply through is secure. You can look at the URL: The first few letters should be “https,” not just “http.”
When to apply for a personal loan in person
In some cases, applying for a loan in person may be your best bet.
- You prefer individualized help: If you like face-to-face customer service and live near a lender, applying in person for a loan can 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 lay out in an application form. You might find it simple to explain in person where you can address follow-up questions instantly.
- You’re a first-time applicant: If you’ve never applied for a personal loan before and are overwhelmed by the process, applying in person could reduce some stress. The loan officer will lead you through the process. However, some online personal loan lenders, like Upgrade, also promise individualized assistance.
- You don’t want to share information online: Not everyone feels comfortable uploading their personal and financial details online. If this is the case, applying for a loan in person may be a better choice.
It’s still important to compare interest rates with other institutions to ensure you get the most competitive rate for your credit situation. Applying in person allows you to ask the officer directly about any rate discounts or perks available.
Pros and cons of applying online
There are some key factors to consider before applying for a personal loan from a bank, credit union or lender through its online application portal.
Pros
- Prequalification: Borrowers can see their potential rates and approval odds without affecting their credit by prequalifying. Prequalifying also makes it easier to sift through lenders and find the most competitive offer.
- Faster funding: Most online applications are marketed as having a simple process and fast funding times, with some offering disbursement in one to two business days after approval.
- More flexible criteria: Brick-and-mortar lenders typically have more stringent minimum requirements than online lenders.
Cons
- Limited assistance: If you apply online outside a lender’s customer service hours, you may need to wait for help if you get stuck. And even then, you might wind up using an unhelpful chatbot or navigating a phone tree.
- Have to submit information online: Although lenders should provide a secure online portal, some borrowers may be hesitant to submit sensitive information, such as their Social Security number, online.
- Easier to make an error: Filling out the application online leaves more room for errors in the process. For example, it’s easier to mistype when filling out your personal information online than it is in person with a loan officer also reviewing your application.
Pros and cons of applying in person
There are both benefits and drawbacks to consider when applying for a personal loan at a brick-and-mortar location.
Pros
- Personalized assistance: The primary perk of applying for a loan in person is the individualized assistance. From application to loan origination, you’ll work with a loan officer to make sure the process is smooth and error-free.
- Member benefits and perks: Some institutions offer perks to borrowers who have banked with them before. Applying in person can make it easier to find these.
- Establishes a relationship: Meeting in person allows you to establish a relationship with a loan officer at your bank. This relationship can make the application process easier down the road should you need to borrow from the institution again.
Cons
- Inconvenient process: Some may find it inconvenient having to physically be inside the brick-and-mortar location, especially if it’s not a convenient location or is a long distance away.
- Prequalification is not as common: Most online lenders allow borrowers to prequalify, making it easier to compare potential offers. However, not every bank or credit union has this option. Even if they do, it’s not as convenient as prequalifying online, and comparing offers may be more difficult.
- Slower approval process: Depending on the institution, applying in person may result in slower funding times. That’s especially true if you have to fill out the application on paper, rather than online.
Bottom line
Online loan applications are common and offer many benefits. The funding process often moves more quickly, for one.
But this option may not be for everyone. Suppose you prefer personal, face-to-face customer service or have an existing relationship with a bank. In that case, getting a more competitive loan may be possible when you apply online.
Whether you apply for a loan online or in person, it’s important to shop around and compare the best personal loan rates to ensure you’re getting the most competitive loan offer possible.
Frequently asked questions
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