Getting a Personal Loan Online: What to Know

Applying for a personal loan online is fast and convenient. Plus, it makes it easier to compare different options from a wide variety of Canadian lenders.

However, applying for a personal loan online doesn’t necessarily guarantee the best offer nor does it mean you will get your money faster.

What is an online personal loan?

An online personal loan is — quite literally — a personal loan that is applied for, funded and managed via an entirely digital process.

In decades past, you might have had to go to your bank or other financial institution in person to inquire about a personal loan and see if you could be approved.

Now it’s possible to complete all steps of the personal loan application process online — from the comfort of your home. An added bonus of online personal loans is that you’re no longer limited to big banks — you can also compare loan offers from online-only banks that don’t operate physical branches.

Security of online personal loans

While some may wonder about the safety of applying for a personal loan online it’s important to note that most banks, credit unions and alternative lenders take security seriously. Many Canadian lenders use multiple layers of high-end security to keep your information and finances safe.

However, it is still up to you to protect your sensitive financial information. Keep things like your login and password safe, use only trusted computers and mobile devices, and educate yourself on malware and phishing techniques so you can avoid them.

How to apply for a personal loan online

One of the biggest advantages of being able to apply for a personal loan online is that you can easily compare multiple options to find the best pick for you. As mentioned above, looking for a personal loan online opens up more options as there are some online-only banks that offer this product.

Since online banks don’t have the same overhead costs as traditional banks, they may be able to offer you better rates. However, your current bank may offer a better deal if you are already a client with several types of open accounts. Again, shop around and compare until you find the best option.

Once you have found the online personal loan that you want to go with, you can usually get started by clicking an ‘apply’ button somewhere on the website. Then, follow the steps as you are prompted.

These steps typically include filling out an application with personal and financial details, signing the loan documents and verifying your income. You will then wait to receive a lending decision and, if approved, get your money.

Where to get an online personal loan in Canada

So, where can you get an online personal loan? Well, there are a couple of options to get you started in your research.

Pros and cons of online personal loans