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Applying for a Loan Online Vs. In Person

Applying for a Loan Online vs. In Person - What’s the Best and Reliable Option?

Updated on January 11, 2023


Should I Apply for a Loan Online or In Person?

Deciding whether you should try applying for a loan online or in person can be a complex process, especially for people who are new to the financing process. Online lenders have a much more streamlined process and may offer more achievable qualification requirements. Listed are some things you must know about applying for a loan online vs. in person, and then decide which would be better for you.

applying for a loan online

What Is an Online Loan?

For an online loan, prospective borrowers can apply online without submitting individual applications to traditional banks. The online loan allows the borrower to pre-qualify for a loan with several lenders without their credit score being affected by hard inquiries. Online loans generally have much more flexible terms and conditions than in-person loans.

They also have simpler application processes, faster processing times, and more competitive interest rates. You can find multiple lenders who won't charge you any processing fee on your loan application.

How Does a Loan Online Work?

You can access online loans from anywhere with a stable internet connection, smartphone, or laptop. You can have a hassle-free time going through all their features, terms, & conditions before deciding. All lenders will have an option to download the application form, which you will be required to fill out and submit digitally.

What Is the Process for Applying for an Online Loan?

Listed are some points you need to consider when making an online loan application:

Know Your Customer

KYC is a mandatory part of all kinds of financial transactions. You must upload the KYC documents digitally to the respective lender's portal for personal online loans. The lender will then authenticate your documents and inform you about the approval of your loan.

Processing Time

The lender will verify your eligibility after you have uploaded the required documents. As soon as the loan is approved, the loan amount is disbursed immediately to your relevant account. The processing time for online loans has reduced drastically.

where to find online loans

When to Get an Online Loan

Applying for a loan in person is tedious, long, and frustrating. Online loans are more convenient and come with various perks, making them a preferable choice for many borrowers. We've listed a few reasons you should consider while applying for a loan online:

Pre-Qualified Loans

Many online lenders allow borrowers to obtain pre-approved or pre-qualified loans with one soft credit check according to their credit score & borrowing needs. If you're unsure of the loan amount or competitive interest rates you'll qualify for, choose an online lender that offers pre-qualified loans.

Unknown Lenders

Some traditional banks offer lower interest rates or terms & conditions to customers with bank accounts or at least some sort of deal with the institution. If you don't have an existing account with the bank, then online loans might be better for you.

Quick Cash

Online lenders generally have a faster processing or approval time than personal loans. If you are lucky and have a good credit score & history, you may get approved for the loan the same day you apply.

Bad Credit Score Or Small Credit History

Getting accepted for a physical loan might be difficult if you have a bad credit score or credit history. Online lenders check your credit score but have a much more relaxed scrutinizing policy. This means your loan request can get approved irrespective of your credit report.

Pros & Cons of Applying for Online Loan

Is it better to apply online or in person? This is a debate that every borrower has every time they need to apply for a loan. Like everything else, online loans have their advantages and disadvantages. In this article, we will break down the pros & cons of applying for an online loan:

Pros Of Applying For A Loan Online


As mentioned previously, with online loans, you can apply from anywhere. Through the use of mobile apps or browser versions, it is just a few clicks away. You can upload the required documents online without worrying about physical submission. Implementing advanced tools like Artificial Intelligence to check your eligibility expedites scrutinization.


Some online lenders provide pre-approved personal loans. This means that based on your income, credit report, and required loan amount, the lender determines a certain amount you can get after you provide the minimum required documentation. Since the eligibility has already been established, the processing time reduces, and the lender can immediately disburse the loan money to your account.

Cons Of Applying For A Loan Online

Smaller Maximum Limit

As a first-time borrower, you may find that your maximum limit is insufficient to cover all your expenses because the maximum amount you can loan is smaller than what traditional banks offer.

Safety Of Data

Be careful regarding which online lender you choose. Data hacking and scams are possible, as the entire process is digital. Selecting a lender who offers you proper security and has authentic reviews and good customer service is essential.

Are the Loans of Online Lenders Reliable?

Online loans may seem risky and insecure, but with proper research, you can find numerous legitimate online lenders. Check their federal registration to verify whether an online lender is safe and legitimate. You can usually find a page dedicated to the registration numbers of an online lender on their official website. In contrast, others put it in the footer section of every page on their website.

where to find loans in person

What Is a Loan In-Person?

An in-person loan is a type of loan that requires visiting a lender's brick-and-mortar office rather than applying online. These loans are offered through traditional financial institutions, such as banks & credit unions.

How Does In-Person Loan Work?

In-person loans are traditionally used for more significant expenses like home or auto loans. This means that the approval process is stricter & requires you to submit more documents so the bank or union can verify a person's ability to repay the entire amount.

How to apply for an in-person loan?

For an in-person loan, you must visit the bank, talk to an employee to see if you can get a loan with your credit score and history, and fill out their loan application form. Once you have filled out the loan application form, the lenders will inform you if your loan has been approved after the scrutinization.

The process is long, but you may find lower interest rates than online loans.

applying for a loan in person

When to Get a Loan in Person?

Physical loans offer a lot more privacy as compared to online loans. If you are unsure about sharing your social security network, opting for a physical loan is better for you. It's also preferable if you want to deal with the lender face to face instead of trusting the digital process.

Pros and Cons of Applying for a Loan in Person

In person, loans have perks and disadvantages, most of which we have discussed below.


If you have dealt with the respective bank, you may get lower interest rates and a smaller application fee. If you want the security of dealing with the loan officer face-to-face, then physical loans are better for you. It is also easier to ask the lenders questions while you fill out the application form.


You won't find pre-approved loans with a bank or credit union, which means the qualification process is much harder to crack, and the processing time is also longer. If you want the cash quickly, in-person loans may not be for you. You will also need to visit the bank to complete the form and submit the physical documents.

Is It Faster to Apply for a Loan Online or in Person?

Online loans are faster in getting approved. Online loans have more generous qualification requirements, and many lenders only require you to submit some essential documentation. This takes a lot less time than the tedious process of submitting numerous documents physically in the bank or credit union. If all your documents are accurate and you have a decent credit score & history, then you may even get approved within 24 hours of applying for the loan.

Physical loans have a much more extended processing period, and their terms to qualify for a loan are also stricter. So, opting for an online loan may be better if you want quick cash.


Eventually, finding a suitable borrowing method depends on your credit score, monthly income, financial requirements, and accessibility. If you have a good credit score, you can choose either way to apply for a loan and have a high chance of getting approved. If you have a bad credit score or do not have a good credit history, you can get approved by online lenders more quickly than physical loans. Analyze your situation thoroughly and then decide which option suits you better. Both online and physical loans have their pros & cons, so you won't be missing out on any perks by choosing one of them.

Photograph of author Joseph Priebe

Joseph Priebe

Joseph Priebe takes pride in assisting audiences with his articles to help them make sound financial decisions.

With over ten years of experience writing financial content his goal at CASH 1 has always been creating engaging and easy-to-digest information for anyone searching for immediate or long-term monetary solutions.

When Joseph is not writing about personal finance, you can find him photographing the Southwest United States with his 4x5 Graflex Crown Graphic camera. He is based in Phoenix, Arizona.