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Is It Better to Apply For Cash Loans Online Or In Person?

by Louise W. Rice
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Traditionally, there were few options available for those who wanted to secure a loan. However, with the development of small loans and fintech companies, people no longer have to worry if they were turned away by banks. Because of lending companies, people can now get loans whenever they need to.  

While it’s easier to acquire loans today, the question still stands if it’s better to apply for loans in person or do it online. Some lenders offer both options depending on what’s comfortable for you. Each side has pros and cons as well. Before submitting an application, it would be better to explore both options.  

In-Person Loan Application 

If you want to apply in person for loans, you would be going to banks and other traditional brick-and-mortar shops. These types of institutions tend to have been around longer and are more established. Larger institutions may have more steady funding as well. Common sense will tell a person to try securing a loan from well-known banks. However, a closer examination will reveal to borrowers if such an institution is best for the financial assistance they need:  

  • A cash store or a bank is near you, so you can drop by anytime you want.
  • You can ask the proprietor or loan officer questions about your loan so you can hear information from them first hand.
  • If you have a pre-existing loan history with the lender or bank, there’s a higher chance of approval on your next loan application. 
  • An in-person application holds more authenticity as you can go through the process face-to-face with the bank representative.
  • With banks, you have to wait up to seven days before finding out if your loan has been approved or denied. 
  • If you’re applying for a loan at a bank, they will ask if you have collateral to present. 
  • You will need to gather and bring specific documents depending on where you want to apply for a loan.
  • You will have to review your personal or your business’ credit history.
  • With banks, you can only apply for large loans, which is why they are suitable for purchasing cars or houses, or financing businesses.

Online Loan Application   

Fast cash loans can be anything, such as payday loans and personal loans. They are also very popular because private lenders are quick to approve applications. Lenders offering fast cash loans provide streamlined processing, and they have a significant online presence. The rise of financial technology apps has also made it easier for individuals with mobile devices to access private lending websites. Some other features are: 

  • You can access the lending company’s website at home or anywhere your device has access to the Internet.
  • Before applying for a loan, you need to check if the website is a legitimate business. Sometimes, scammers create websites to phish for personal information.
  • Online lenders are offering unsecured loans or loans that don’t require collateral. 
  • You can quickly make comparisons between multiple lenders’ rates and fees online without having to visit each business. 
  • You must fill in an online form and release your personal information without seeing the loan officer face-to-face—however, the process is faster. 
  • If the website has a chat representative, you can ask any questions regarding your loan. However, you must read the terms and conditions before agreeing.  
  • You will need a bank account where you will receive the cash amount.
  • Online lenders quickly grant loans within the day. 
  • Online loans need very few requirements compared to large institutions such as banks.   

Other Factors to Help You Decide 

  •  How fast do you need the money? 

While it was mentioned above that banks need more time to process your request, speed may not matter to you if you’re applying for a loan well in advance. However, if you are strapped for cash that you may need for emergencies, an online lender might be a good idea.  

There are online lenders releasing cash amounts the same day of the application, which is appropriate for emergency cases. Borrowers are saving time as well, and they don’t have to wait long for approvals from lenders who are not offering what they want.  

  • Which one offers lower rates? 

Online lenders are more likely to raise interests and fees because they have limited funding. Cash reserves are coming from private investors or other banks and institutions expecting large returns for their investments. Those, in turn, are raising the cost of online loans. 

Banks have access to the federal reserves, plus the savings and checking accounts of retail customers—they are free to make use of those funds to lend out. And because they have little to zero interest to pay for those bank deposits, the cost of processing loans is meager compared to private lenders.   

  • Do you have the time to apply for a loan? 

Which lender can offer you the most convenience? That’s another thing to consider, especially during this time when curfews and social distancing measures are in place around the world. When you need a loan, online lenders are accessible at any time of the day, and the processing is faster. Some private lenders are also releasing loans during the weekends. 

With banks, they only operate on business days during limited hours. When you’re busy and working full-time, there is no time to go to a bank as you’re likely in between working and running the household. 

  • Are you comfortable with giving out personal information?  

In order to apply for a loan, regardless of whether it’s in person or online, you will have to provide a lot of sensitive, personal information like your social security number. Considering the importance of this information, many potential lenders question how safe it is to give away your information, especially online. 

Banks tend to invest heavily in cybersecurity and are under strict regulation to keep your information safe. They make use of audit trails, authentications, secure infrastructure, and processes. They also have network security that they regularly update in order to protect their shareholders’ and depositors’ accounts.  

Private lenders may or may not invest insufficient network security to keep information hidden, so it is uncertain how well they would hold up against hacking or phishing. Such businesses also tend to sell data to other companies so they can send you unwanted emails.

  • Which one has requirements that are easier to accomplish? 

Personal loans from banks require good credit scores. U.S. Bancorp, for example, offers $1,000–$25,000 for a FICO credit score of 680 and above. Other than that, the bank will need your social security number, individual taxpayer number, employment information, and home address. There are also instances that you may forget a requirement, and you may have to go back home to retrieve what you forgot.  

With online lenders, you can get an unsecured loan even with a low credit score and the same personal information. You can easily consult your documents stashed at home if you’ll only need to apply for an online loan.  

  • Which one is eager to answer your questions?  

Banks have trained personnel to handle loan applications. They have capable loan officers to ensure that they run background checks and see if you have provided all of the required information. They are also trained to answer your queries about the loan. You can also ask about any penalties you may incur if you delay payments.  

Private lenders use agents to answer your questions as well. However, if the loan company you’re dealing with is not regulated, you could be looking at a scam. There’s also a risk of finding deals that are too good to be true that you can be sucked into taking it if you’re not carefully checking all of the details. You could end up paying interest rates that are too high for you to pay back regularly.   

  • Which one is more reputable?  

Banks and traditional lenders have experience and good business ethics to back them up. They may also be well-known because of extensive marketing efforts: newsprints, television commercials, and billboards. They have a reputation to uphold as a household name that consumers can turn to when it comes to financials.   

When it comes to online lenders, you have to do your diligence to avoid shady online lenders. One way is to read trusted reviews on online lenders and take note of customer experience when dealing with them. You may also check the U.S. Consumer Financial Protection Bureau (CFPB) database that contains complaints by former customers.  

In Conclusion  

Both online private lenders and banks have pros and cons. They are under regulation to protect customer information and give interest rates that anyone can afford. However, each is also better in some circumstances and worse in others. Banks can offer more considerable sums for businesses and require substantial proof of capacity to pay. Online lenders process loan applications faster and are best during emergency needs. Whichever you choose, you must be sure to pay off your loan at the given date to avoid getting into more debt. 

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