Online or In-Person: Which Loan Access Best Suits Your Needs?

Millions of people are faced with financial circumstances that they are not ready for, causing them to seek outside sources for help paying for their obligations or needs.  With the number of people in need of financial help increasing by the day, businesses specializing in different types of loans have been becoming more readily available as well.

Online or In-Person: Which Loan Access Best Suits Your Needs - lending image

Today someone in need of a loan can choose from a multitude of different options, from unsecured small personal loans to larger, secured loans for big purchases.  In addition to this abundance of selections, potential borrowers can also apply in person or online at their convenience, 24 hours a day.

Before you decide that you are ready to apply for a loan, however, you need to decide which type is the best one for your financial needs.  Look over all of your options before signing on the dotted line: there may be a better route to fix your current situation than the one you are currently in process with or thinking about getting.

The Ease – and Dangers – of Online Loans

Mobile apps and online stores have gotten us used to convenient shopping at the click of a button.  We rarely have to interact with anyone, choosing instead to complete the buying process impersonally without pushy sales people or outside opinions.

Online loan shopping is similar.  You can apply for a personal loan through your phone, laptop, or tablet any time of day or night, any day of the year.  Many people prefer this route because they don’t have to fear rejection – if you are not approved for one loan, you can move on to the next, but this constant checking of your credit can silently impact your score without you even realizing it.

On the other hand, using online loan review sites like https://loanreviewhq.com/lender/net-credit-review/ can give you immediate access to loan calculators to help you estimate your monthly payments based on the amount you want to borrow before you go any further in the process.

These online sites also are transparent about their loan criteria and repayment terms, helping you to get all of the information you need before you make a decision about which type of loan you want to take out and how much you should borrow.

Customer service for online sites varies depending on the company.  Some places have direct contact through customer service center chats, while others require you to make a phone call if you have any questions, often at specific times of the day when their office has their working hours.  Many of these loan specialists are located outside of the United States, so when you are online shopping for a loan you may not receive customized service that is individualized based on your needs.

Applying for a Loan in Person

This may seem inconvenient to those consumers who are used to immediate service, but there are definitely benefits to applying physically at a bank or consumer loan business.  Sitting down one-on-one with a customer service specialist can help you understand your options and seek out a loan that is tailored to your needs.

However, loan shopping in person has drawbacks to it as well.  While online loan applications can be done at your convenience, using an in-person service means that you are limited to when you can apply.  You may have to set an appointment, travel to the location, take time off of work, and consider a number of inconvenient factors that make applying in person more cumbersome than looking online.

In addition to the scheduling inconveniences, sitting down in person to complete the paperwork necessary for your loan to be approved may require documents that you forgot or did not realize that you needed.  Before your loan can be processed, you would have to return home, retrieve the missing papers, and return to the bank.

Another downside of in-person loans is that you only have access to the information that your loan specialist gives you.  That means you have to take at face value the interest rates and repayment terms that you will be responsible for.  Searching online allows you to compare rates and terms, giving you the opportunity to get the best possible deal on your loan.

Types of Personal Loan Options

There are two main types of loans:  secured and unsecured.  However, underneath that umbrella of terms there are more specific types that you should understand before you decide which one is right for you.

To start, unsecured loans are the most common for smaller purchases.  These loans do not require you to put any of your personal property up for collateral and simply rely on your financial information and your credit score to determine whether or not you qualify and what your interest rate will be.

Secured loans are more common with large purchases, such as opening a business.  These loans do require collateral, often in the form of your home, your car, CDs or savings accounts, or other valuable items that you own.

Personal loans are often unsecured.  These can be obtained in a variety of ways.  Fixed rate personal loans have interest rates that are the same throughout the terms of the loan.  Variable rate loans have interest rates that may fluctuate up or down based on a predetermined schedule.  They may have a cap of how much each adjustment can change, but it’s usually not in the consumer’s favor.  Installment loans are generally fixed-rates, while credit cards or lines of credit tend to be variable rates.

Installment loans are small loans obtained for a specific amount, at which time terms are agreed upon for a specific monthly payment to be made to repay the debt over a scheduled period.  These can be secured or unsecured and often include such purchases as mortgages, automobile financing, and basic personal loans.

Line of credit loans are often used for large expenses such as home repairs, medical expenses, or college tuition.  In a line of credit, you are allotted a certain fund amount, which you can use, repay, and use again until the time period of the loan has run out, by which time you should have paid the entire amount in full.

Another option for borrowing money is a short term loan.  These tend to have higher interest rates, more fees, and more stringent repayment terms.  They are often called payday loans and are used by people who need access to immediate cash without a lot of credit checking and paperwork.  Other short terms loans can be secured by property, such as the title of your vehicle.  While there are fewer fees involved, failure to repay these loans can result in the loss of your personal property.

A very common way to borrow money is through credit cards.  With a credit card you have immediate access to the credit limit, as long as you are paying your monthly payment regularly.  Your interest rates are based on your credit score and can be fixed or variable.  Your monthly payment is usually based on a percentage of your balance versus your maximum credit limit.  Keeping your balances high can impact your credit score negatively, however, and having multiple credit cards with high balance to limit ratios will often cause your interest rates to rise.

In addition to making immediate purchases of goods and services, credit cards are also used for cash advances.  In these, you have access to cash up to a certain amount depending on your maximum benefits, but cash advances tend to have higher interest rates attached to them.

People also use credit cards to transfer their balances from one loan with high interest rates to another card that may have lower rates or better repayment terms.  Some credit cards also offer rewards for balance transfers or purchases.  However, before you choose a balance transfer, be sure to compare the options available, fees that may be incurred, and introductory rates versus long-term rates in case you are not able to pay off your balance within the initial period of time.

Watch for These Features in Your Loan

No matter what type of loan you are borrowing, you need to know that your lender is reputable and your terms are reasonable.  Your rates should be competitive and your repayment terms should be flexible.  Check for fixed-rate interests, which stay the same throughout the life of the loan, versus adjustable-rates, which may start out low but then balloon up if you have not paid your balance by a preset date.

Be careful of hidden terms, as well.  Some companies will charge you a hefty fee if you pay off your loan early.  They also may charge processing fees and other hidden numbers, adding them onto the balance that you owe and charging you interest on the already high fees.

Regardless of the loan you choose or how you go about applying – either online or in-person – there are pros and cons to each of them.  Do your research and analyze each type of loan before deciding on the one that is right for you, and comparison shop for the best repayment terms and interest rates that you can be approved for.