Applying For a Loan Online vs. In Person: What’s Better?

Article Summary:

Both applying for a loan online and in person come with their own risks and benefits. For example, you may want to apply for a loan online if you need financing quickly. However, if you don’t mind the wait and have questions about your loan, you’ll likely prefer an in-person application experience. In many cases, applying both online and in-person is the best option.

If you’re looking to finance some big-ticket items, you’re probably weighing your options regarding how to get a loan. There was a time when the only way to get a loan was to go into a physical bank or other financial institution and talk to a loan officer. These days, with the advent of technology, you can apply for a loan online in just a few minutes.

But what are the pros and cons of this new method? Is it more convenient, or are there hidden dangers? And what are the main differences between applying for a loan online vs. in person? In this post, we’ll break down the pros and cons of each option so that you can make the best decision for your needs. Let’s take a look.

What is an in-person loan?

Applying for a loan in person simply means visiting a brick-and-mortar financial institution to apply for financing. This can include banks and credit unions. Unlike applying for a loan online, meeting with a loan officer face-to-face gives you the chance to ask questions and get personalized advice. You can do this for both secured and unsecured loans, such as personal loans.

However, the in-person application process can sometimes be cumbersome and time-consuming. Comparison shopping multiple loan offers this way cant consume a lot of time and effort. For this reason, some people prefer to apply for loans online instead.

When should you apply for a loan in person?

Under certain circumstances, you may be better off applying for a loan in person, even if that means waiting a little longer to receive your financing.

  • Existing relationship with your financial institution. If you’ve been with your existing bank for a long time, working with a physical branch may offer you more advantages. For instance, you may receive lower interest rates or better repayment terms as a repeat customer.
  • Uncomfortable with submitting personal information online. Online lenders will request much of the same information an in-person loan officer will. However, you may feel safer showing a physical person sensitive information rather than inputting your social security number into an online form.
  • Have several questions regarding your loan. In addition to a face-to-face interaction, you’ll likely want to apply for a loan in person if you have questions about your loan and you want to interact with a physical person.
  • Don’t need fast money. Online loans are convenient when you need money quickly. But if you have some time to kill before that financing is necessary, an in-person loan may be worth considering.

What is an online loan?

Online loans are a type of financing you can apply for without setting foot in a traditional bank branch or credit union. They’re convenient because you can complete the loan application process entirely online, and they often offer quick approval times. So if you’re tired of waiting in line at the bank or filling out mountains of paperwork, online loans can be a great alternative.

Even if you have a close relationship with your bank or credit union, it is smart to get quotes from a few lenders online before you head to your branch. This way, you will have a good idea about what rates you can get with other lenders.

Just keep in mind that since you won’t have the opportunity to speak with a loan officer in person, you might not get the same level of customer support and personalized loan service.

When should you apply for a loan online?

Similar to in-person loans, online loans may be better for you if one of the following situations applies.

  • Always. There really isn’t a situation where you shouldn’t get a few quotes online from lenders that don’t require a hard pull on your credit. It only takes a couple of minutes, and it won’t hurt your credit. Start here.
  • No relationship with a financial institution. If you only recently opened a bank account or haven’t stayed with one bank for long, online lenders may offer you better terms than your current institution.
  • Don’t have the best credit score. An online lender may consider factors other than your credit score when determining whether to lend to you. For instance, if your credit score is on the lower side, but you have a strong history of making timely utility payments, you may still be approved for a loan.
  • Want to prequalify before applying. Some online portals will allow you to see what loan terms you prequalify for depending on your credit score and financial situation. While this doesn’t guarantee you a loan, this can give you a better idea of what your loan terms might look like.
  • Need money fast. Without all of the paperwork to comb through, online loans process faster than in-person loans. So if you need money quickly, you may be better off applying for an online loan.

What do banks look at when applying for personal loans?

Whether you’re applying for a loan online vs. in person, there are a few key things that most financial institutions will look at before approving you for a loan.

First, they’ll want to see your credit score to determine your creditworthiness. They’ll also look at your credit history to understand how you’ve handled borrowing in the past. In addition, you might need to show proof of income so they know you can afford the loan payments. And finally, they’ll calculate your DTI (debt-to-income) ratio to assess your borrowing risk.

So before you fill out a loan application, look at your credit report and other personal financial information to make sure you’re in good standing. Otherwise, lenders may reject you for not meeting the basic requirements.

How hard is it to get a personal loan from a bank?

It depends! Some loan lenders have high credit score requirements, anywhere from 600 to 700, and some accept scores as low as 580. Keep in mind that loans with lower credit score and less stringent eligibility requirements typically charge higher interest rates.

But if you’re willing to shop around and compare offers from multiple lenders, you should be able to find a personal loan that meets your needs and fits your budget. Take a look at some of the lenders below, all of whom offer personal loans for borrowers with a credit score of 600. To see how your rates compare, simply input your credit score into the top bar.

Pros and cons of applying for a loan online

Though online lending has revolutionized how we borrow money, it also comes with risks and disadvantages. Here are some pros and cons of working with online lenders.


Here is a list of the benefits and drawbacks to consider.

  • Allows you to get prequalified without hard credit inquiries
  • Faster loan approval and funding time — sometimes within the same day
  • Some online lenders charge little to no processing fees
  • You can comparison shop easily, without having to physically visit multiple lenders
  • The online loan application process is typically more streamlined and efficient
  • Borrowers can be more susceptible to online lending scams
  • An online lender requires borrowers to submit sensitive information online, such as SSN and home address
  • Harder to negotiate better terms without seeing the loan officer face-to-face

Pros and cons of applying for a loan in-person

Just like applying for a loan online, there are pros and cons to applying for in-person loans.


Here is a list of the benefits and drawbacks to consider.

  • If you have a pre-existing relationship with a bank, you can negotiate lower fees and more competitive interest rates
  • Being able to talk to a loan officer in person can make the loan application process less confusing and stressful
  • You might not have the option to prequalify for a loan
  • You have to visit a brick-and-mortar bank branch to submit the required documents
  • The application approval and funding times tend to be longer

Pro Tip

If you’re applying for a loan online, it’s important to look out for predators. Be wary of lenders who guarantee approval without knowing your credit score or employment history. Also, avoid lenders who insist on upfront fees or make promises that sound too good to be true.


What is the best way to apply for a personal loan?

There’s no one-size-fits-all answer to this question, as the best way to apply for a personal loan depends on your individual circumstances and preferences. If you like the idea of face-to-face interaction, you might want to consider applying in person. This can give you the opportunity to ask questions and get tailored advice from a loan officer.

On the other hand, applying for a personal loan online might be the way to go if you want a faster loan approval. Whichever route you choose, just be sure to compare rates and terms from both brick-and-mortar bank and online lenders before you commit to anything.

How can I increase my chances of getting approved for a loan?

So you’re considering applying for a loan, but you’re unsure if you’ll be approved. Here are three tips to help increase your chances of getting the financing you need.

  1. Check if you prequalify for the loan. Many online lenders have tools that allow you to see if you meet the basic requirements for a loan. This can give you a good idea of your chances of being approved before filling out an application.
  2. Work on improving your credit score. Lenders look at your creditworthiness as one of the most important factors when considering whether to lend to you. If you want to increase your chances of loan approval, work on your credit score by paying your bills on time and maintaining a good credit history.
  3. Consider a cosigner or joint applicant. If you know someone with good credit willing to cosign or apply for a loan with you, this can increase your chances of being approved.

What is the fastest way to get a loan approved?

Applying for a loan in person can be a time-consuming and stressful process. You have to gather your financial documents, complete a lengthy application, and then wait for a decision from the lender.

If you’re in a hurry to get the money you need, your best bet is to apply for a loan online. Most online lenders have streamlined the application process, so you can complete everything in just a few minutes.

Is it better to get a loan from your bank?

If you’re thinking about taking out a loan, you may want to consider getting one from your bank. Why? Because if you have a good history of paying bills on time at your bank and have developed a personal relationship with them, they may be more willing to negotiate favorable terms. This can include lower interest rates and monthly payments.

Plus, if you already have a relationship with your bank, you may feel more comfortable working with them on a loan than with another lender. Of course, every situation is different, so be sure to still shop around and compare rates before making a decision.

Key Takeaways

  • There are two main ways to apply for a loan: online or in person.
  • Online lenders simplify the loan approval process by making the applications more streamlined and straightforward.
  • If you’re not in a rush to receive funding, applying for a loan at a brick-and-mortar bank can give you the opportunity to negotiate better terms — especially if you have a good relationship with the bank.
  • If you decide to apply for a loan online, make sure to do your research on the lender and watch for any red flags. Many scammers take advantage of unsuspecting consumers, so it pays to be cautious.

Compare all of your loan options

So, what’s the verdict? Should you apply for a loan online or in person? Well, it depends on what’s important to you. If you value convenience and flexibility, applying for a loan online is probably more your cup of tea. But if you prefer a personal touch, then meeting with a loan officer in person might be the better option.

Remember, whether you’re applying in person or online, compare rates and terms from multiple lenders before making a decision. That way, you can get the best possible deal on your loan.

View Article Sources
  1. Create a loan application packet — Consumer Financial Protection Bureau
  2. Consumer Alert: Online Personal Loans — Virginia State Corporation Commission Bureau of Financial Institutions
  3. What is a Co-Applicant? Definition & Examples — SuperMoney
  4. How To Get a Personal Loan With Fair Credit — SuperMoney
  5. 9 Ways To Get a Loan With No Credit — SuperMoney
  6. Your Personal Loan Application was Denied: What’s Next? — SuperMoney
  7. How to Get Approved for a Personal Loan — SuperMoney
  8. 7 Reasons Why Lenders Decline Your Loan Application — SuperMoney
  9. How To Qualify For A Personal Loan? — SuperMoney
  10. 2021 Personal Loans Industry Study — SuperMoney
  11. Best Personal Loans for the Unemployed — SuperMoney
  12. Best Online Personal Loans — SuperMoney
  13. Best Personal Loans — SuperMoney