Thinking of getting a loan, but unsure about the difference between applying for a loan online vs. in person? Depending on your needs, one may be better than the other. And it’s crucial to familiarize yourself with the processes you may encounter when applying online and in person.
Even though there are important differences between how banks and credit unions operate, they both usually have physical locations for in-person business. Although to keep up with the popularity of online lenders, many of these institutions now have online platforms as well.
Keep reading to learn about some of the advantages and disadvantages of an online or in-person loan.
When Does Applying for a Personal Loan Online Make the Most Sense?
Applying for a loan online comes with its advantages. And depending on why you need funds could be the smoothest option for you.
Online Loans Have Faster Loan Approval
Online loans offer a fast and straightforward process. In some cases—especially with small online loans such as short-term emergency funding through a cash advance— you could find out about eligibility in just a few minutes. And once approved for an online loan, the funds can be accessed virtually overnight, in as little as one business day sometimes.
You should consider whether online direct deposit loans are the right option for you, as it could make funding available in as little as a few minutes. Brick and mortar banks and in-person lending businesses may not offer this speed without an internet presence.
And so, if you need funding from a quick cash lender, applying for an online loan could be the better option.
Online Lenders Tend To Have Lower Operational Costs
Brick and mortar lenders such as banks, credit unions, and private loan lenders have more costs than online lenders. Because of this, online lenders can pass those savings on to their customers.
Keep in mind like most lending, your credit score and credit history will impact the costs of a loan.
Find Out About Pre-qualification Sooner
Pre-qualification is the initial approval process for loans. Lenders will ask for a rough estimate on a few credentials. From here, they will let you know right away whether you should spend time filling out more information or simply do not meet the requirements. With an in-person loan, you will have to put in more effort and time before finding out about pre-qualification.
A personal loan, a credit card, and more can all be found with an online lender if you do not want to apply for a loan in person.
In What Scenarios Does an In-person Loan Work Best?
In-person loans definitely have their benefits and uses. For larger loans such as a mortgage, it would make sense to talk to someone face to face rather than an online-only experience. Below are a few reasons you may want to consider in-person loans rather than online lending.
For some people, personal interaction and personalization are essential for the loan process. With a face-to-face exchange, you can ask more effective questions and get clarification in the moment.
Are You Comfortable Finding an Online Lender?
When applying for loans online, you will have to find online lenders first. Major reputable banks, credit unions, and financial technology companies operate online. However, there are tons of personal loan scams out there that use fake platforms to steal your sensitive financial information. And if you don’t have time to familiarize yourself with the signs of online loan fraud, you may be at risk.
And so, if you don’t feel comfortable navigating the online space, then an in-person loan will be a better option. In-person loans sometimes require an appointment, so keep that in mind before heading to a credit union or bank branch.
Would You Be More Comfortable Submitting Documents in Person Rather Than Online?
Submitting personal financial information online may not be the preferable option for many people, especially when applying with multiple lenders. And so, if you do not feel comfortable with online lenders, an in-person loan is the way to go.
Establishing a Relationship With an In-person Lender Could Help You Get Better Rates and Loan Terms
Suppose you have a bank account with a specific bank and have established a relationship through a particular broker/ loan officer. With this relationship, you may find that in-person interactions increase your chances for certain offers. With established relationships, you can look forward to better interest rates and financial products even with a lower credit score or less than desirable credit history with a credit bureau.
You can find almost every kind of loan, including personal loans, unsecured loans, student loans, and mortgages at a traditional bank, or a credit union. These institutions will usually have a brick-and-mortar store in addition to an online presence.
The Bottom Line
Trying to decide whether you should apply for a loan online or in person, but not sure what is the better option? The good news is that applying for a loan online vs. in person won’t make a huge difference—simply because most brick-and-mortar locations offer a loan online.
The decision between online or in-person loans comes down to your personal preference of getting through the application process. An online loan application provides a quick process and lets you know about approval in a few minutes.
While an in-person interaction can help give a more thorough and approachable look at the loan terms and help you take control of lender access to your personal information.
Whatever your preference of loan application, there are tons of loan options available whether you are shopping online or in person.