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Should You Apply for Small Personal Loans Online or in Person?

February 12, 2021 by Daniel Azzoli

two hands shaking.

Even without the global pandemic forcing many storefront businesses to move their operations online, there was already a whole host of services and products to browse through on the internet. In fact, when it comes to the financial world, the ability to get your banking-related errands done online, browse through different financial products, and complete all sorts of other financial tasks has existed for a while now. So it makes sense that borrowing money is no exception.

These days, you can learn more about different borrowing options, look at different types of loans, compare different rates, and apply for loans such as small personal loans online.

But just because you can do these things online, doesn’t necessarily mean that it’s the right move for your particular situation. So, if you’re looking to apply for a personal loan or line of credit, you’ll need to decide whether you want to do this by walking into a storefront lender, or by going online.

A big part of making this decision involves figuring out what parts of the borrowing experience are most important to you. If you like to talk to an expert face to face whenever you’re shopping for any sort of product, then an in-person loan may be a better fit. But if your priorities are speed and convenience, an online loan might make more sense for you.

Today, we’re going to try to help you by going over what online lending really is in more detail, and then we’ll look at some important questions you should be asking yourself when trying to decide whether to apply for loans such as small personal loans online or in person.

What are Online Loans?

In basic terms, online loans are loans that are offered by (or through) a financial institution over the internet.

The type of financial institution that offers these loans could be one that deals exclusively in online loans, or it could be a lender that offers small loans online and in person.

person doing research on small personal loans online on their laptop.

Having said that, in the context that we’re talking about in this article, when we discuss online loans, we’re generally talking about loans that are solely offered online. This means that if you want to apply for one of these loans, you’ll only be able to do it over the web. This also means that the majority of the common steps involved with borrowing money – like filling out the application, signing documentation, getting your money, and paying off your loan – will also happen primarily over the internet. However, depending on the financial institution you’re dealing with, some of these steps may happen over the phone, or at least you’ll have the opportunity to speak to a customer service agent on the phone if you have any questions.  

Should You Borrow Online or in Person? Ask Yourself These 2 Questions

If you’re looking to borrow money, you might have a clear idea of your needs and the experience you’re looking to have. Maybe you’re a person who would rather get everything done from the comfort of your own home, or you have a job that makes it hard for you to get to a financial institution during their business hours. If that’s the case, then getting small personal loans online may be the obvious choice for you.

But what may be a clear choice for one person may not be for another. Not everyone is totally comfortable with a primarily digital process, and there are some important factors you’ll need to consider.

So, to try to get to the bottom of what service would work best for you, here are some important questions for you to consider before you apply for a loan.

1. Are you Comfortable Sharing Your Personal Information Online?

This may not be a surprise to you, but if you’re going to apply for small loans online, you’re going to have to be comfortable giving some personal information electronically. This could include things like your Social Security Number, banking information, and employment information.

person doing research on small personal loans online on their computer

While this is generally safe as long as you’re working with an online lending company that has up-to-date and robust security measures in place, you’ll need to make sure you do just that: work with a responsible lender. If you’re not comfortable with making this determination, or you’re just not comfortable sharing sensitive personal information online, online loans may not be for you. You also may be better off applying for a loan in person if you’re not particularly tech savvy and don’t feel comfortable managing things digitally.

2. How Quickly do you Need Funds?

We’ve already mentioned this, but if your priority is to get funds as fast as possible, online loans may be a better route for you to go. In many cases, the entire process of borrowing money online can move a lot quicker.

To begin with, when you’re applying for a loan in person, you’re going to have to do it on the storefront’s time. This means you’re going to have to find time during your busy day to head to a storefront, and if you can’t for whatever reason, tough luck. With an online loan on the other hand, you can often complete your application 24/7. Financial institutions may also have underwriting systems in place that can process your application and either approve or reject it quickly, whereas the process of making this decision for storefront lenders can take longer. If your online loan application is approved, you could get your funds as soon as the same business day depending on the lender and certain other factors.

It’s not just the application and processing that can move a little quicker with online loans. The research process from your end can also be streamlined. Financial institutions that offer small personal loans online or any other type of online loans, will often post the rates and terms of their loans on their website, so comparing the important details of different loans from different lenders is fairly simple. You won’t need to spend precious time applying for a loan only to find that the offer you receive isn’t what you’re looking for. Depending on your purpose of applying for a loan, urgency can really make a difference. For example, getting funds fast can be especially important if you’re facing an emergency expense and don’t have an emergency fund or the savings to deal with it.

Be Aware of the State of Your Credit History

Your credit history can often play a big role in determining what kinds of loans you might be approved for, and more specifically, the rates and terms of those loans.  As such, make sure to be aware of the state of your credit history.

Loan companies, such as an online lending company will often take a look at your credit score to help them determine how responsible of a borrower you are. However, this won’t always be the case. For example, there might be some times where your credit score may not play a factor in determining the rates or term of your loan, but could affect the total amount that you’re approved for.

person holding a black binder and looking at small personal loans documents

But in general, the better your credit history, the bigger your selection of borrowing options may be, and the better rates you’ll get. Conversely, if your credit is bad, these options tend to narrow and the rates of these loans may not always be as favorable as you’d like. Having said that, if you need to borrow money to help you handle an emergency but don’t have great credit, there may be borrowing options out there for you, such as online personal loans for bad credit.

While most financial institutions, whether they’re brick and mortar or online, will look at more than just your credit score to determine your creditworthiness, depending on the type of loan some lenders may place more importance on certain requirements other than your credit history. This could include things like your income, your employment situation, and more. By doing so, it can allow people with poor credit to still have access to borrowing options when they’re in a pinch.

Ask Yourself the Right Questions

One thing that we hope is clear from this article is that there isn’t a single obvious choice that suits every person’s circumstance. The truth is, your situation is unique to you, and there are all sorts of variables in the equation that could make one choice right for you and wrong for someone else. It’s up to you to do your research, learn as much as you can on the topic, and do your best to make the right decision for your financial situation.

When you’re thinking of applying for small personal loans online, and especially when you’re facing an emergency and you need funds right away, you’re going to want to make sure that:

  1. You’re able to get money when you need it
  2. You’ll have the ability to meet the terms of your loan and make all of your payments on time.

Whether you apply for a personal loan or line of credit online or in person isn’t as important as making sure that you find an option that suits your needs. But the only way to do that is to be thorough in your search for a loan and put in the time to find what works for you.


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