More and more lenders are now offering online applications, however some people still adhere to traditional lending methods. You need to decide whether you need personal services, whether you will be comfortable applying online, how soon you need money and where you can get the best deal.
Online Loans vs Loans Near Me?
If you want to get a personal loan, then now you have a large number of options that will make the process as convenient as possible. You probably know that there is a traditional way of borrowing – visit the lender's store (or bank) and apply in person. For example, if you are a resident of California, you’ll need to google for the lending companies in the state. Then you check if you qualify online. Then you choose the best lender, and look for their locations in your city. As you’ve found the nearest address, you prepare all the documents and drive to the store.
However, now there is also another interesting option – an online application, which helps borrowers to get money for their needs almost instantly, provided that they meet the basic eligibility criteria. Remember that there are some laws and restrictions on loan amounts, rates and terms in every state. For example, in California you are allowed to take out maximum $255 loans online.
You should pay attention to the fact that those companies that are engaged in financial technology and offer personal loans, encroach on banks in the lending business. So, according to Experian (one of the most popular credit bureaus), fintech companies provided almost half of unsecured loans in March 2021 (compared to the fact that they provided only a quarter in March 2015).
While some major national banks do not offer loans to individuals, others do offer their own online options. For example, this year PNC Bank launched online loans for individuals in order to attract those customers who cannot get services at regular locations.
Thus, there is a growing trend towards digital technologies in lending, and it is likely to continue for a long period of time. However, experts note that there is still a client base that adheres to the traditional approach to lending.
Now, due to growing competition, consumers can choose where they receive funding – online or at a lender's (or bank's) store. Don’t forget to check the government requirements and regulations on loans you want to apply for. Below are a few key points to consider before making a decision.
4 Steps That Will Help You Decide Where To Get A Loan
1. Do you need personal services?
Of course, the biggest difference between online and offline funding is personal communication. Thus, if this interaction is important to you, then most likely a traditional application is more suitable for you. What's more, many borrowers also value the security of knowing who is processing their loan. Thus, they want to know that there is a person who is monitoring their lending process. Moreover, some experts argue that the borrower has a chance to negotiate a lower rate if he personally speaks with the person he has a relationship with.
However, it is still worth paying attention to the fact that banks, more often than not, pass on to the consumer operating costs that online lenders do not have (which can lead to high interest rates).
2. How urgently do you need money?
If you need financing as quickly as possible, online lending is most likely the right choice for you. More often than not, online lenders (and banks with an online option) approve applications and make a decision much faster than if you applied at a lender's store (usually withing an hour or one working day). Surely you also understand that you will need to spend some time in order to get to the lender next to you, wait in line, fill out a large amount of paperwork and wait for approval. With an online application, you can get approval and funding the same day you fill out the form (or within one business day).
Thus, online lenders can significantly speed up the process, however you must ensure that you meet the eligibility criteria of the selected lender in order to apply. This way, if you have a good or excellent credit history, you will be able to gain approval and deal with your needs as quickly as possible.
3. Is it convenient for you to apply online?
You probably know that in order to apply online, you will need to provide some personal information about yourself, such as bank account information, social security number, and so on, as required by the lender. So, first of all, you need to be sure that you can provide it yourself (although the process is usually quite simple). You should also understand that online lending means only online communication, without personal contact, which can be somewhat difficult for people who have a hard time getting along with computers and the Internet.
Moreover, you should also beware of all sorts of scammers who may steal your personal data though. You will need to pay attention to such things as the website address, reviews of the credit company on the Internet, and a large number of other factors. Thus, if you cannot determine whether the lender is operating legally, the online application will be the most suitable option for your wishes and needs.
4. Which offer is the best?
Of course, when choosing a loan, first of all, you need to pay attention to interest rates, as well as additional commissions and payments (not where to apply). Of course, a convenient lending process is also important, but you probably don't want to overpay just to apply in person.
You should also be aware that some online lenders offer their borrowers to pre-qualify and find out what potential interest rates and loan terms they can get. Of course, this option can be very useful if you are comparing several loan offers and choosing the best one. Thus, first of all, pay attention to the interest rate and other payments that a particular lender offers, compare offers, and then choose where to apply – online or offline.
Important! If you want to get money quickly, an online application will be the most suitable option for you as lenders can approve it almost instantly. But in any case, do not forget to pay attention to interest rates.
