Is It Better to Get a Loan Online or In Person?

Traditional In-Person Lending

Despite the rapid growth of online lending, there are still compelling reasons why many borrowers continue to take the conventional path of applying for a loan in-person at a local bank or credit union branch:

Banking Relationship Advantage - If you have an existing, long-standing relationship with a particular bank, their loan officers may be able to offer you more competitive rates, fees and repayment terms compared to other lenders. They will also have complete insights into your financial profile and banking history to advise you better.

Personal Assistance - Having a dedicated loan officer guide you through the lending process in real-time and help translate all the fine print and technical details can provide invaluable clarity and reassurance - especially for larger, more complex loans. You can get immediate answers to any questions rather than waiting for email responses.

Physical Documentation - Some borrowers, particularly older generations, still highly value paper documentation over digital copies and contracts when dealing with major financial transactions.

In-Person Verification - With an in-person application, a loan officer can physically verify and notarize documentation face-to-face rather than relying on digital uploads that could potentially be fraudulent.

Potential Disadvantages of Applying In-Person

The disadvantages often cited with in-person lending include:

Inconvenience and Time Commitment - You have to make time during working hours to travel to the bank branch, wait for an available loan officer, and potentially make repeat trips depending on what documentation needs to be reverified and processed. This can be incredibly inconvenient if you have an inflexible work schedule.

Limited Lending Options - Since you can only apply at one physical bank location at a time, you are restricted in the number of lenders you can feasibly get quotes from - unless you are willing to visit every major bank in your area. Online lending platforms provide a much broader view across dozens of potential lenders.

Slower Processing Times - Even for borrowers who get expedited treatment due to a strong banking relationship, the manual processing of documents, verification and approval processes will generally register as slower compared to an online application that gets filtered through automated systems rapidly.

Less Rate Transparency - Unlike online lenders that publish their current rates and fee schedules plainly on their website, it can be more difficult to comparison shop rates across different local banks and understand exactly what your loan is costing.

So Which Lending Route Is Better?

When it comes down to it, there is no definitively superior choice between the online and in-person loan application routes. The better option depends heavily on your unique loan requirements, personal financial scenario and individual priorities.

In general terms, online lending is usually preferable if:

• You need funding relatively quickly and have average to excellent credit
• You are tech-savvy and comfortable managing things digitally
• The loan amount is smaller (e.g. personal loans, auto loans, student loans, credit cards)
• You want the ability to shop rates transparently across multiple lenders before deciding
• You don't need extensive hand-holding and personal assistance through the process

Conversely, the in-person route tends to be advisable if:

• It's a larger, more complex lending product like a mortgage, business loan or substantial debt consolidation
• Speed of funding is not necessarily the highest priority
• You have an established banking relationship that can be leveraged
• You are not as technologically inclined and would value human guidance
• You still heavily prefer paper documentation formalities

Other factors that could help guide your decision:

• Credit Profile - Those with very poor credit may find it easier to get approved through in-person underwriting
• Amount of Documentation - Online lending is very documentation intensive, while a loan officer may be able to streamline some requirements
• Customer Service Needs - Online lenders typically have email/chat support, while in-person provides direct banker access

Conclusion

Ultimately, you should carefully evaluate your specific loan needs along with your relative prioritization of factors like speed, convenience, personal assistance, custom advice and lender options. Weigh the tradeoffs between the online and in-person lending processes to determine which path aligns better with your borrowing situation.

The growth of online lending has dramatically increased competition and loan accessibility. But traditional in-branch lending remains deeply entrenched, especially for larger-scale borrowing needs where customized expertise and human assistance can have significant value. Having the ability to choose between these two primary options ensures borrowers can find the right loan on their preferred terms.

The information is provided for educational and informational purposes only. Such information or materials do not constitute and are not intended to provide legal, accounting, or tax advice and should not be relied on in that respect. We suggest that You consult an attorney, accountant, and/or financial advisor to answer any financial or legal questions.