Please ensure Javascript is enabled for purposes of website accessibility

This device is too small

If you're on a Galaxy Fold, consider unfolding your phone or viewing it in full screen to best optimize your experience.

Skip to main content

Guide to Online Personal Loans: Applying for a Loan Online vs. In Person

Updated
Christy Bieber

Our Loans Expert

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

Sometimes you need to borrow money quickly. That's especially true if you're coping with an emergency situation or an unexpected expense. 

Easy online loans could be the answer. Your lender will enable you to complete your application process digitally without going to a bank or working with a loan officer.

But is an online loan the right answer, or should you get a loan in person? We'll break down the differences.

What are online loans?

Online loans are simply personal loans you can get without visiting a bank or a credit union. Easy loans online usually won't even require you to talk to a loan officer. 

You can do all of the following online:

  • Compare rates, loan amounts, and terms
  • Submit an application
  • Get pre-approved for a loan
  • Arrange to have money deposited directly into your bank account

Loans with an all-digital application process are routinely offered by online-only lenders that don't have physical bank branches. But a growing number of traditional banks and credit unions also offer fast loan options that don't require in-person or phone contact.

What can online loans be used for?

Online loans are no different from any other personal loan in terms of how the money can be used. You can generally use the funds for anything you want. This could include paying for home repairs, financing big purchases, or consolidating your debt. 

Compare the best personal loans

Get the best rates and terms to fit your needs. Here are a few loans we'd like to highlight, including our award winners.

Lender APR Range Loan Amount Min. Credit Score Next Steps
7.99% - 24.99%
$2,500 - $40,000
660
7.80% - 35.99%
$1,000 - $50,000
None
8.99% - 35.99%
$2,000 - $50,000
550
Apply Now for Best Egg

Powered by Credible

How does the online personal loans process work?

If you're looking for an unsecured loan (one that doesn't have collateral a lender can take if you don't pay), an online lender offers a fairly easy process.

Here's how it works:

  • You fill out an online loan application. Include basic information like your name, Social Security number, employment status, and income. (If you're unemployed, take a look at our guide to getting a loan while unemployed for more information on what to list as income.)
  • The lender may ask what you plan to do with the loan. For example, the lender wants to know if you need the funds to remodel your home, for debt consolidation, or to pay off high-interest obligations like a title loan or credit card debt.
  • The lender checks your credit history. It will run a "soft" credit check that has no impact on your credit score.
  • The lender either approves or denies your application based on the credit check. If it's denied, the lender is required to let you know why.
  • Once you're approved, the lender gives you a loan offer. It includes interest rate, loan term options, and any add-on charges, like an origination fee or prepayment penalty.
  • You should compare several loan offers. Then you can let a lender know if you're ready to proceed.
  • The lender will do a "hard" credit pull when you give the go-ahead. This will verify that your financial information is still accurate. The hard credit check will lower your credit score slightly, but your score will rebound with regular monthly payments.
  • The lender may ask for additional documentation. For example, it may ask for photo ID, income verification, or tax records. You can simplify the process by having documents (like pay stubs and tax returns) ready when you apply.
  • You sign a contract and wait for funding. Loan proceeds are deposited into your bank account in one to 14 days, depending on the lender.

Can I get a loan online with bad credit?

Yes -- there are a number of online lenders that specifically cater to bad credit borrowers. They make it possible to get a personal loan with bad credit

You'll typically need at least a fair to good credit score for a personal loan -- even from an online lender. If your credit score isn't perfect, make sure to shop around with multiple loans for fair credit (rather than simply applying to the first loan you find) to increase your chances of getting approved.

Just be sure to read the fine print carefully when you shop for a bad credit loan. Some personal loans for bad credit have poor terms, such as high fees. Make sure you compare interest rates and check the lender's Better Business Bureau rating or other customer reviews to ensure you're dealing with a reputable lender.

Pros and cons of online loans

Because there is no one-size-fits-all financial decision, it's important to weigh the pros and cons. Here are some of the great and not-so-great things about an online personal loan.

Pros

  • Simplifies the personal loan process
  • State-of-the-art technology makes application easy
  • Often faster to get approved than a traditional loan
  • Some of the lowest APRs in the personal loan business
  • Easier to get a debt consolidation loan to get rid of high-interest debts like payday loans
  • You can build credit by making regular monthly payments

Cons

  • Some lenders offer high minimum loan amounts, making it difficult to get a small loan for emergencies
  • If you need a bad-credit loan, you will likely be hit by a high interest rate
  • You may need to work with a brick-and-mortar lender If you want a secured loan (one where you put up collateral to protect the lender's investment)

Applying online vs. in person: Which is right for you?

Deciding whether to apply for a personal loan in person or online depends on several factors. Here's a breakdown of scenarios when one option might be preferable over the other:

Apply in person when:

  1. You prefer personal interaction: If you value direct, face-to-face communication and feel more comfortable discussing your financial situation and loan options with a bank representative or loan officer, applying in person is the way to go.
  2. You have questions or complex needs: For those with unique financial circumstances or numerous questions about the loan process, applying in person can provide the opportunity to get immediate, tailored responses that you might not as easily receive online.
  3. You are working with a small local bank or credit union: Some smaller, community-focused banks and credit unions may offer more personalized service and potentially better loan terms for members of the local community but may have limited online application capabilities.
  4. You're not tech-savvy: If you're not comfortable with or prefer not to use technology for financial transactions, applying in person is a logical choice.

Apply online when:

  1. You want convenience: One of the biggest advantages of online applications is the convenience. You can apply from anywhere, at any time, without the need to travel to a branch during working hours.
  2. You're looking for quick approval: Online lenders often use automated systems to review applications, which can mean faster approval times compared to traditional in-person applications. This is crucial if you need access to funds quickly.
  3. You want to easily compare options: The internet makes it easier to compare loan offers from multiple lenders in terms of interest rates, fees, and terms without the need to visit each institution in person.
  4. You prefer digital documentation: Online applications can simplify the paperwork process, allowing you to upload documents electronically and receive loan agreements through secure platforms.

Both options require consideration of:

  • Interest rates and fees: Whether applying online or in person, it's essential to compare the costs associated with different lenders.
  • Your credit score: Be aware that your credit score will influence the loan terms you're offered, regardless of how you apply.
  • Security: Online applications should be submitted through secure websites to protect your personal information. Similarly, when applying in person, ensure you're dealing with a reputable lender.

Ultimately, the best choice depends on your personal preferences, the level of urgency, and the specific lenders you're considering.

It's wise to evaluate both options based on how comfortable you feel with the process, how quickly you need a response, and where you're likely to get the best loan terms.

How to apply for an online loan

It's simpler than ever to get easy loans online. You just need to follow a few key steps, including:

1. Get your documents together

In most cases, you can submit an application for a loan with very little financial paperwork. However, you should collect a few key documents, including pay stubs, tax returns, and a recent bank statement. That way you won't hold up your loan approval while you hunt down a document.

2. Compare rates and fees

Unfortunately, some online lenders offering quick loans charge high origination fees or high interest rates. Compare total loan costs carefully to find a loan that's affordable. 

3. Complete and submit your application

Most online lenders have streamlined the loan application process so you can complete it entirely online in just a few minutes. You should even be able to upload any requested financial documents. 

4. Provide bank details for the funds transfer

The quickest way to get your hands on the cash is usually to have your money directly deposited. So make sure you provide the details necessary to complete the transaction. 

As you can see, it's pretty straightforward to get a fast loan online. Once you've found the right lender with an affordable loan offer, just submit your application and provide your bank information. If you qualify based on the lender's requirements, you should be able to get funding ASAP and can use it for pressing financial expenses.

The Ascent's best personal loans

Looking for a personal loan but don’t know where to start? Our favorites offer quick approval and rock-bottom interest rates. Check out our list to find the best loan for you.