NEW YORK, September 19, 2022 (Newswire.com) - Most people who want to borrow money understand they have various options. They might have questions before they move forward, though. Are personal loans taxable? What's a reasonable interest rate? Should you apply for an online loan, or is it beneficial to head to a bank or credit union for a face-to-face meeting with a lender?
In this article, we'll concentrate on that last question. There are potential benefits and drawbacks to getting an online personal loan or meeting with a lender in person. You should know about them before you proceed.
Online Loan Pros
Let's start by talking about getting a loan online. You can apply to many different banks, credit unions, or other entities this way. You can use a laptop, desktop, smartphone, or tablet to apply for an online loan.
Probably the biggest convenience if you try this method is that you don't have to leave the house. That can save you some time and gas money. You can sit comfortably on your couch and apply for a loan with no issues.
You can also sometimes get approved almost instantly if you apply for a loan online. The bank or other lending entity to which you apply can determine whether you're an appropriate loan candidate based on the information you give. If you get approved, you can sometimes have your money that very day.
Online Loan Cons
Some people are uncomfortable giving an app or website a lot of their personal information, which you'll have to do if you apply for a loan. You're likely giving this bank or other lending entity all of your contact information, your annual income amount, and even your social security number.
If you apply for an online loan, check to see what security measures the lending entity offers on its website or app. You should also use a secure network connection, such as your home's password-protected Wi-Fi. Don't use a public connection, such as one at a coffee shop or library.
In-Person Loan Pros
If you go to a lending entity in person and apply for a loan, you might have a preexisting relationship with that lender. You might even know a particular banker with whom you've done business.
Because of this, you might have a better chance of getting the loan approved or getting a lower interest rate. You can also ask questions about the loan conditions in person, which some borrowers appreciate.
In-Person Loan Cons
If you go to a lending entity in person and apply for a loan, that application process might take longer. If you need the money urgently, applying online might be the better move.
Your credit may also take a hit if you apply for a loan this way. Applying in person at a lending entity usually involves submitting to a hard pull, also called a hard inquiry. You do not want to do this often because of the damage it does to your credit.
Which Option is Better for You?
Applying for loans in person works better for some, while applying online is better for others. If you apply in person, you may get a better interest rate or loan approval because of a preexisting relationship with the lender. However, it may take more time to get approved, and your credit score will likely take a hit as well.
If you apply for a loan online, you can sometimes get it that same day. It's also convenient to apply for a loan without needing to leave the house.
On the negative side, you might not feel comfortable giving a bank or another lending entity all your sensitive financial information online. You can alleviate this problem somewhat by checking the site's security measures and never applying for a loan through a public Wi-Fi connection.
If you need a loan, consider the pros and cons of applying in-person or online before moving forward.