Applying for a loan online vs. in person: Which is better?
Key takeaways
- Completing a personal loan application online is generally a quick and low-effort process — if you have the right documents ready.
- In-person applications require meeting with a loan officer at a bank or credit union, which means the application process can take longer.
- Compare interest rates from both online and in-person lenders to be sure you are getting the best rate for your financial profile.
Most lenders, including banks and credit unions, offer online and in-person applications for personal loans. Online lenders, like the name implies, typically only offer an electronic application for you to use.
While applying online is often faster and more convenient, in-person assistance may help you better navigate the process. In addition, working with an institution you already bank with may give you access to perks for existing customers.
Your choice should ultimately be based on what works best for you. Every application will require the same types of information, and many lenders offer prequalification. Check your rates and potential terms online, then choose three to five lenders that meet your needs to determine whether you should apply online or in person.
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 applications, banks and credit unions may also offer online personal loan applications. These allow you 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. 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.
Pros and cons of applying online
Pros
- Prequalification availability: You can check your potential rates and approval odds without affecting your credit by prequalifying for a personal loan. 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, there is always risk when you electronically submit sensitive information such as your Social Security number.
- 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.
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. A few online lenders are able to 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.”
Pros and cons of applying in person
Pros
- Personalized assistance: The primary perk of applying for a loan in person is 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 an account. Working with a loan officer at your current financial institution may help you take advantage of any discounts or other benefits.
- 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 less common: Not every bank or credit union offers prequalification. Even if it does, 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 instead of a computer.
When to apply for a personal loan in person
Applying in person allows you to ask the officer directly about any rate discounts or perks available. Still, compare interest rates with other institutions to ensure you get the most competitive rate for your credit situation.
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 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.
How to get a personal loan from a bank
You can apply for a personal loan from almost every bank — or credit union — online or in person. Regardless of which option you choose, the eligibility requirements are the same, says Trevor Smith, corporate branch manager at Wasatch Peaks Credit Union.
- Review your credit score: Check your credit score to ensure you can meet a bank’s minimum credit score requirements before applying.
- Gather any required documents: Although documentation requirements vary, some banks might request your Social Security number or a copy of your driver’s license and a copy of your most recent W2 or tax return.
- Shop around: After you’ve gathered the required documents, compare rates and terms from multiple banks. If possible, prequalify with multiple lenders to preview your potential rates.
- Submit an application: Once you’ve found the best deal, submit a formal application online or in person. This process can be time-intensive, so set aside time to ensure all the information you provide is accurate.
You may have to submit different documents depending on which option you choose. “The required documents can vary slightly, due to the fact that when you apply online, and are not a current member, you will need to upload a photo of your ID and a photo of yourself to properly verify your identity,” says Smith.
How to get a personal loan online
The application process for an online lender is similar to that for a bank — you just won’t have the option to visit a branch. You will still need to review your credit score, gather necessary documents and shop rates at multiple lenders.
What makes an online application different is your ability to quickly compare rates and loan terms. Prequalify with a few lenders that work with your credit score. This will allow you to find a lender that meets your borrowing needs and is affordable. You can also use a personal loan calculator to make sure your monthly payment fits your budget.
Bottom line
Online loan applications are common and typically offer a funding process that often moves more quickly, for one, but this option may not be for everyone. If you prefer personal, face-to-face customer service or have an existing relationship with a bank, 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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