Online or in-person loans What's better?

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Online or In-Person loans: What's Better?
Think about what is more important to you: speed and ease of use or speaking face-to-face with a loan officer at the bank.


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Last updated on Mar 3 2022.

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Many financial technology companies offer individual loans online. However, whether an in-person or online loan is more suitable for you will depend on what you value most.
If you prefer a face-to-face experience, choose brick-and-mortar banking. If you're in need of quick financing and modern features like mobile loan administration, a option could be a good choice.
Whatever your choice, the best choice of lender is the one that has the lowest interest rates. Compare offers from several lenders to find the loan most suitable to your needs.
Online vs. bank loan: pros and cons
Pros



Cons



Pre-qualification is usually offered that doesn't impact your credit.
Faster loan approval and distribution often on one day.



Fully online loan applications and the approval process requires that customers must be comfortable submitting forms and financial details about themselves with very little personal interactions.



Having a preexisting relationship can result in higher odds of approval and lower rates, or more favorable conditions.
Face-to-face personalized service to help with the application and loan managing processes.



There is usually no pre-qualification process that allows you to view loan rates and terms without impacting your credit.
Approval of loans and loan disbursement could take several days or even longer.









Here are five questions to think about when deciding between the bank loan and the online loan.
Is it safe to take loans from online lenders safe?
Online lenders' loans are just as secure as loans originated from large banks as long as the lender online is trustworthy.
A reputable lender, whether online or otherwise, generally will check your credit, and then discloses the fees and conditions that apply to the loan and also checks to ensure that the loan will not cause financial damage before approving the application.
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Do you value personalized loan service?
One of the most obvious difference between banks and online lenders is the face-to-face exchange that you can get in a bank that is physically located.
If you're looking for personal contact and the peace of mind of knowing who's handling your loan the bank could be the right choice for you, according to Eric Simonson, a Minneapolis-based certified financial planner, and owner of Abundo Wealth.
"Some people prefer to be sure that they have a trusted person to ensure that the loan is approved without a hitch for them," he says.
Additionally, you could be able to negotiate a lower interest rate or be able to qualify with a lower credit score if you're talking to a person you already have established a relationship with in an institution, Simonson says.
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How fast do you need to get the money?
If you need a loan quick, then online may be the right option.
The online lenders -- and traditional banks with an online presence can sometimes process an application and make a decision more quickly than banks without an internet connection, Jackson says.
Some lenders will fund the loan the same day as you apply, or the following business day.
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Online-based lenders can also expedite your research process if they publish their rates, according to Todd Nelson, senior vice president of strategic partnerships for , an online lender.
"If you have good credit it's not a big deal about whether you'll get approved," he says. "What you're most concerned about is, "Am I going to spend my time applying for an loan and then getting an offer I don't want?'"
Are you confident with Do you feel comfortable lending money online?
For the online loan applicant, they'll need to electronically share information like you Social Security number, education background and bank account details that could require you to grant an access right to your lender.
Particularly in these instances beware of fraudsters. Milwaukee-based CFP Ben Smith with Cove Financial Planning advises that if you're not certain whether an online lender is legitimate, the safest option is to use an actual bank.
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The process of managing a loan on the internet, which generally means your only contact with the lender is via an agent for customer service is a challenge for folks who aren't technologically or financially savvy, Jackson says. If you're one of them then the experience that is solely online may not be a good fit.
Where can you get the most effective loan?
No matter if it's from the internet or branch of a bank the best loan is one that has rates, terms and features that meet your requirements. Examining multiple offers from both bank and online lenders can help ensure you're getting the best value for your situation.
Simonson says that if you have a less than desirable credit score A community bank or credit union might be more willing to accept the risk of lending to you than a big financial institution, or online loan provider might be.
Some lenders online let you view your rate potential, which is helpful information to know when you are shopping around. You may also be able to pre-qualify with multiple lenders on NerdWallet and it will not affect the score of your credit.
See if you pre-qualify for an individual loan and it will not affect your credit score
Answer a few simple questions to receive personalized rate estimates from multiple lenders.






About the authors: Annie Millerbernd is a personal loans writer. Her work has been featured on The Associated Press and USA Today.


Jackie Veling covers personal loans for NerdWallet.







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