Should You Apply for a Loan Online vs. In Person? How to Choose

Whether you should apply for a personal loan online or in person depends on your borrowing needs and personal preferences.

No matter how you apply, the best lender is usually the one that offers the lowest interest rate, so it’s a good idea to compare personal loans from multiple lenders.

» MORE: How to get a personal loan

Similarities and differences between online and in-person loans

Regardless of whether you apply for a personal loan online or in person, the requirements and information requested on the application will likely be the same.

Your application experience differs in the timing and convenience of getting your loan. If you want to compare multiple loan offers, apply from home and get a fast approval decision, an online application can make sense.

However, if you favor a face-to-face experience, you don’t have reliable internet access or you’re not comfortable submitting your personal information online, you might opt for a traditional brick-and-mortar bank or credit union.

Many banks and credit unions give applicants the option to either apply online, over the phone or in person, though some require a branch visit — especially for new customers. Online lenders with no physical storefronts only offer online applications.

» MORE: Where to get a personal loan

Pros and cons of online loans

Advantages of applying for a loan online

• Pre-qualification is widely available. Many online lenders let you pre-qualify to see your potential loan amount, rate and repayment term without a hard credit check, and you can use that information to compare offers. NerdWallet recommends pre-qualifying with multiple lenders before formally applying.

• Fast approval and loan disbursement. Online lenders typically process loan applications within a day, and some can fund a loan the same day you apply or the following business day.

• Apply any time of day. Unlike brick-and-mortar banks, you don’t need to schedule an appointment or work around business hours to apply for a loan online.

» MORE: Best online lenders

Disadvantages of applying for a loan online

• You must share personal information online. With an online loan application, you must electronically share information like your Social Security number and income. The lender may also require access to your bank account. Lenders take measures to keep your information safe, but if you don’t feel comfortable sharing sensitive information online or you don’t have private internet access, applying for a loan at a physical bank or credit union may be right for you.

• Limited or no human interaction. You’ll only be able to contact an online lender via the phone or internet. Working with an online lender can be challenging if you don’t have reliable internet access or aren’t technologically savvy.

• May be difficult to distinguish reputable lenders from predatory ones. While many online lenders are as safe as brick-and-mortar banks, some predatory lenders lurk online. You can research common red flags of personal loan scams, but if you’re not comfortable checking the reputation of the lender, applying online may not be for you.

When to consider applying for a loan online

Applying for a loan online may be fitting for you if you want a quick, streamlined process completed from the comfort of your home. It can also make sense if you want to pre-qualify with multiple lenders to compare loan offers or if you plan to fill out the application outside of typical business hours.

Pros and cons of in-person loans

Advantages of applying for a loan in person

• Existing customers may find it easier to qualify or get rate discounts. You may have the opportunity to negotiate a lower rate or qualify with a lower credit score if you have a good preexisting relationship at your financial institution. Some banks offer rate discounts to qualified bank customers.

• Personalized assistance applying for and managing the loan. If this is your first loan application, you may be more comfortable working directly with a loan officer to understand different terms and conditions. Applying in-person also gives you the ability to ask questions in real time rather than searching through website pages or emailing customer service representatives. 

• Greater peace of mind in sharing personal information. If you don’t feel comfortable sharing personal information such as your Social Security number, income and bank account information online, applying for a loan in-person may be your best option.

» MORE: Best bank loans

Disadvantages of applying for a loan in person

• More difficult to shop around for the best offer. Applying for a loan in person means potentially accepting the offer from the first bank or credit union you visit, rather than comparing offers among multiple lenders. Visiting several financial institutions to compare offers will be time-consuming, and you may not have the option to pre-qualify when applying in person. 

• Limited selection of lenders. When you apply in person, you’re limited to the banks and credit unions that have physical branches near you. If you live in a rural area, your selection could be low.

• Loan disbursement may take several days or longer. Banks and credit unions can take up to a week to approve loan applications, particularly if you’re applying in person and have to schedule appointments with a loan officer.

• Can only apply during business hours. When you apply for a loan in person, you may be restricted by the bank’s hours of operation, and you may have to schedule an appointment in advance.

» MORE: How long does it take to get a personal loan?

When to consider applying for a loan in person

Applying for a personal loan at a physical bank or credit union location may be the right option if you don’t feel comfortable completing an online application or if you prefer to have a loan officer guide you through the process. It may also be fitting if you have a good relationship with your local bank or credit union and it offers a discounted rate or requires an in-person visit to close the loan.

» MORE: How to apply for a bank loan

Tips to distinguish between reputable lenders and scams

Loans from online lenders are as safe as loans originated from large banks, provided that the online lender is reputable.

A reputable lender checks your credit, discloses the loan’s costs and verifies your ability to repay before approving your application. The lender should also have a license to do business in your state.

The Consumer Financial Protection Bureau (CFPB) maintains a list of state bank regulators, which you can use to find out whether the lender you’re considering has a valid license.

The bottom line: Where can you get the best loan?

Regardless of whether it’s from an online lender or a bank branch, the best loan is the one with costs, terms and features that match your needs. Comparing multiple offers from lenders can help ensure you’re getting the best value for your situation.