Applying for a Loan Online vs. In Person: What’s the Difference?
Written by
Daria Uhlig
Edited by
Melanie Grafil
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Both online and in-person loan applications can be safe and efficient, but they differ in terms of convenience, speed and personal support. One option might suit you better, depending on your needs and preferences.
Key Differences Between Online and In-Person Loan Applications
When you’re exploring how to get a loan, the difference between online and in-personal application processes might sway you toward one or the other.
Here’s a side-by-side look at online and in-person loan applications.
| Feature | Online | In Person |
|---|---|---|
| Funding speed | Fast, usually 1-2 days | Slower, usually 3-5 days |
| Convenience | -Compare rates from multiple lenders -Apply 24/7, from anywhere |
-Difficult to compare rates -Limited by location and branch hours |
| Support | Limited to phone or chat | Face-to-face, in real time |
| Risk of scams | Medium — use caution | Low |
Choice of Loan Types and Lenders
In Person
- You’ll have to select a lender that’s close by.
- Most are banks and credit unions, some of which only make personal loans to existing customers, or limit loan amounts for non-customers.
- They also might limit the availability of some loan types to residents of select states.
Online
- Applying for a loan online gives you a much wider selection of lenders to choose from because location doesn’t matter.
- You can work with either a bank or a non-bank lender.
- You can get a wider variety of loan types.
- If one online lender doesn’t offer the loan you want or doesn’t loan in your state, you’ll likely have an easy time finding plenty of others that do.
Ability To Compare Rates and Loan Features
In Person
In-person applications generally don’t allow for prequalification, even if the lender offers it online. Applying with several lenders in order to find the best rate is impractical and can have a significant impact on your credit score.
Online
Online application processes often let you prequalify for loans and receive rate quotes, with no impact on your credit score. This makes it easy to compare rates and terms from several different lenders.
How Long It Takes To Apply
In Person
Applying in-person typically takes longer. In addition to the time it takes to drive to the lender’s location, you’ll sit down with a loan officer to discuss the kind of loan you want, how much you want to borrow and your qualifications. This discussion extends the time it takes to apply.
Online
Online applications, on the other hand, usually take just 10 or 15 minutes if you have the information handy when you start.
How You Submit Documents and Sign Paperwork
In Person
When you apply for a loan in person, the lender will ask you to bring in documents such as:
- Your ID
- Proof of income
- Bank and/or investment statements
After the application is complete, you’ll sign the application to complete the process. This might include the promissory note and other closing documents while you’re with the loan offer.
Online
An online application lets you upload your documents by take a photo of them with your cell phone, or by linking to your financial institution or paycheck provider. You’ll sign documents digitally — no paper and no ink signatures required.
How Much Support You Get During the Application
An in-person loan application gives you much better support because you’ll be sitting in front of the loan officer. They’ll walk you through the process, and you can ask questions or voice concerns, if you have any.
Online applications often give you the option of speaking with a live representative. While helpful, it’s not the same as working face-to-face with a loan officer, and you won’t have an opportunity to build a relationship.
How Long It Takes To Approve and Fund Your Loan
The approval and funding times for online and in-person loans aren’t always different.
In Person
If the in-person lender uses an automated decision tool and can submit documents digitally to the underwriter for verification, you might get your loan approved the same day.
Funding can also be very fast, especially if you’re applying at a bank or credit union where you already have accounts. However, work on your loan might be restricted to business hours.
Online
Your chances of quick approval and funding are better with an online application because the process is almost always fully automated. Plus, it begins as soon as you submit your application, regardless of the time of day or day of the week.
Pros and Cons of Applying in Person
Applying in person has benefits, but it’s important to also consider the drawbacks.
Pros:
- Real-time help if you have questions and concerns
- Opportunity to build a relationship with the lender
- Can help you get approved if you’re having trouble qualifying for your loan
Cons:
- Process might be slower
- Limited to local lenders and business hours
- Might require more paperwork
Pros and Cons of Applying Online
Knowing the pros and cons of applying online will help you decide if this is the right choice for you.
Pros:
- Approval and funding might be faster
- Apply any time, from your phone or computer
- Easy to compare multiple lenders
Cons:
- Less personal support
- Risk of scams if you don’t use a reputable lender
- May not be available for all types of personal loans or in all locations
Are Online Loans Safe?
Online loans are safe as long as you choose a trusted, licensed lender.
The Federal Trade Commission recommends searching the lender’s name along with terms like “review,” “complaint” or “scam.” You can also search them on the Better Business Bureau website.
Your safest bet is to stick with your own bank or with well-known lenders such as Discover®, SoFi® and Rocket Loans.
4 Signs You Should Walk Away From a Lender
Avoiding the following will help ensure that you won’t get scammed:
- Lenders that promise guaranteed approval
- Lenders that charge upfront fees
- Unsolicited “loan” checks you receive in the mail
- Unsecured websites
When Should You Apply Online vs. In Person?
The right choice for you depends on your needs and preferences.
Apply online if:
- You need the loan fast
- You’re comfortable working online and submitting documents digitally
- You want to compare rates easily
Apply in person if:
- You want one-on-one help
- You’re applying for a large or complex loan
- You prefer a local or community lender
FAQs About Applying for Loans Online vs. In Person
Here's a look at a few other common questions borrowers have about applying for a loan online compared to in-person.- How can I apply for a loan online?
- Research lenders, and check their reputations online.
- Once you've decided on one, review the application instructions to find out what documents you'll need to provide.
- Apply for the loan by clicking the button that says "Apply," "Get Started" or whichever option allows you to begin the process.
- It's best to begin after you've gathered all of your supporting documents, such as your ID, proof of income, bank statements, and info on your assets and debts.
- Are online loans safe?
- Yes, if you're working with a reputable lender, online loans are safe.
- Is it better to get a loan online or from a bank?
- If you appreciate working face-to-face with a loan officer and can wait a few days to get the loan money, consider applying in person. An online loan is better if you need quick funding and are comfortable working online.
- What do I need to apply in person vs. online?
- You'll need similar information and documents either day: Government-issued photo ID, Social Security number, your employer's information and any proof of income and assets the lender specifies, for example.
- Do online loans get approved faster?
- Not always, but in many cases, yes, online loans tend to get approved faster.
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