Applying for a loan online vs. in-person

Applying for a Loan Online vs. In Person

56.2% of Americans with personal loans borrowed from a bank. Online lenders came in second at 32.2%, and credit unions came in last at 26.5%.1 Thinking of getting a loan but unsure about the difference between applying for a loan in person vs. a loan online? 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 substantial 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 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, personal loan or otherwise, comes with its advantages. Depending on why you need funds, this could be the smoothest option for you. 

Here is a quick overview of the general advantages:

AspectOnline LoansIn-person Loans
Loan Approval SpeedFast and straightforward, with eligibility often confirmed within minutes. Funds can be accessed as soon as the next business day in some cases.Typically slower due to a more traditional process which may not have the digital efficiency of online platforms.
Operational CostsLower due to the lack of physical infrastructure, potentially leading to better rates for borrowers.Higher due to the costs associated with maintaining physical branches, which may reflect in the loan terms offered.
Pre-qualificationRapid pre-qualification process allows for quick feedback based on basic credentials.Slower pre-qualification process, requiring more effort and time to receive feedback.
Loan VarietyVariety of loans, including personal loans, credit cards, and short-term emergency funding.Wide variety as well, but might be geared towards larger loans such as mortgages where in-person interaction is beneficial.
Ease of AccessAccessible anywhere with an internet connection, providing a convenient option for quick cash needs.Requires a visit to a physical location, which might be less convenient but provides a personal interaction.
Impact of Credit ScoreLike traditional lending, credit score will impact loan terms and costs.Similar impact of credit score and credit history on loan terms and costs.

Below are more details on some of the advantages:

Online Loans Have Faster Loan Approval

Online loans, including personal loans, offer a fast and straightforward process. In some cases—especially with small online loans such as short-term emergency funding through cash advance loans— you could find out about eligibility in just a few minutes. 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 they could make funding available in as little as a few minutes. These loans can be personal loans or bad credit loans such as payday loans. 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, 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 at 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 option will be a better option. In-person loans sometimes require an appointment, so keep that in mind before heading to credit unions or banks.

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.

First-time Borrowers

If you’re venturing into the borrowing realm for the first time or you are new to the financial landscape of a region, the process can be somewhat intimidating or confusing. In-person consultation can provide a scaffolding of support and guidance that can be invaluable in such scenarios. 

When you apply for a loan in person, you have the opportunity to speak with a loan officer or a financial advisor who can explain the loan terms, interest rates, repayment schedules, and any other pertinent details in a comprehensible manner. They can also provide insights into how the loan may impact your credit score and financial standing in the long term. 

Moreover, they can answer any questions you might have, demystify any confusing financial jargon, and provide personalized advice based on your financial situation. This personalized interaction can provide a sense of reassurance and clarity, ensuring that you fully understand the commitment and responsibilities you are about to undertake with a loan.

Need for Immediate Clarification

The world of loans and finances is replete with technical jargon and complex terms that can be baffling, especially if you are not well-versed in financial parlance. In-person interactions provide a platform where immediate queries and clarifications can be addressed. 

Unlike most online lenders, where you might have to sift through FAQs or wait for email responses, in-person interactions allow for real-time clarifications. If there’s a term in the loan agreement you don’t understand or if you are unsure about the implications of certain loan conditions, being able to ask questions on the spot and receive immediate, clear explanations can be immensely beneficial. 

This immediate access to expertise can help prevent misunderstandings and ensure that you are making well-informed decisions. Furthermore, having a professional explain complex loan terms in simple language can provide a better understanding of the loan you are considering, enabling a smoother, more transparent borrowing experience.

An Example of Applying for a Personal Loan Online vs. In-Person 

Curious about what the process will look like when you apply for an online loan vs. applying for a loan in person. Here is what the process may look like when applying for a personal loan online with a bank credit union or strictly online lender:

  1. Research online personal loans—through online lenders, banks, or credit union options.
  2. Inquire about the loan.
  3. Verification with the online loan — for example, you’ll need an ID with an online loan.
  4. Find out approval and get funding with a personal loan.

Here is what you can generally expect when applying for a personal loan in person with a bank or credit union; additionally, you may see the process with private lenders as well:

  1. Research your personal loan options.
  2. Go to a location.
  3. Meet with a loan officer and begin applying for a loan (bring your loan documents).
  4. Finish the application process.
  5. Find out about approval (you may not get an answer right away) and get funding. 


Why might someone prefer an in-person application over an online one?

In-person loan options provide a personalized experience, often handled by a loan officer who can offer tailored advice. This face-to-face interaction at a bank or credit union can help build a stronger lender-borrower relationship, potentially leading to better loan terms. Additionally, individuals may feel more secure handling sensitive financial documents in person.

How does pre-qualification differ between online and in-person loan applications?

Online loan application processes typically provide instant feedback on pre-qualification, saving the applicant time. On the other hand, in-person loan applications may require a more extensive dialogue with a loan officer, who may provide a deeper insight into the applicant’s credit history and other financial metrics.

Are there specific types of loans that are better suited for online or in-person applications?

Larger loans like mortgages may benefit from an in-person application due to the complexity of the loan terms. Conversely, online lenders might be more suitable for smaller, urgent loans like personal loans, where swift approval is crucial.

How do online and in-person loan applications handle sensitive financial information?

While online personal loan lenders employ robust security measures to protect sensitive information, some individuals might find the tangible security of in-person loan options more reassuring, especially when dealing with multiple lenders.

Is there a difference in the variety of loans available online versus in person?

Both online and in-person funding options cover a wide range of loan types. However, online lenders offer a more extensive variety sometimes, and comparing loan products is often easier online.

What should individuals be cautious of when seeking online loans to avoid scams?

It’s vital to ensure that online lenders are reputable before providing any personal or financial information. Looking for reputable lenders with proper licensing and positive reviews can help avoid potential scams.

Applying for a Loan Online or in Person: What’s the Final Verdict From CreditNinja?

The decision between applying for a loan online or in person largely hinges on personal preference, the urgency of the financial need, and the type of loan in question. Online loans often promise convenience and quick approvals, while in-person loans offer a personalized experience and the reassurance of face-to-face interactions.

Whether opting for an online loan or a loan in person, understanding the intricacies of the loan process and exploring options from reputable lenders, be it traditional banks, credit unions, or online lenders, is crucial to making an informed decision that suits your financial circumstances. 

Learn more with CreditNinja’s online blogs. If you need funding, apply for a personal loan through us with an online loan application!  


  1. How much money do Americans borrow? Personal loan stats |

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