Like any financial product, personal loans online have their benefits and drawbacks. Consider the pros and cons below to decide if an online loan is right for you:
Pros
Saves time. Instead of driving to a bank or credit union, you can apply for an online loan from the convenience of your home, any time during the day or night.
Easy to compare. Prequalifying for online loans usually only takes a few minutes, and if you use LendingTree’s personal loan marketplace, you could receive up to five loan offers from lenders at one time.
May be easier to qualify for. Generally, personal loan requirements for online lenders are easier to meet than those of a bank or credit union. This means that a wider variety of borrowers might be able to get a personal loan when they’d otherwise be denied.
Cons
Sometimes have higher APRs. As a general rule, the easier it is to qualify for a loan, the higher the APR. Many banks and credit unions offer low average APRs because they only lend to current account holders.
Less guidance. If you apply for a loan at a bank or credit union, a loan officer or other representative will be there to walk you through the process. With an online loan, you may have to handle the application more independently.
Could find an unscrupulous lender. Most personal loan lenders are legitimate, but you may be more likely to run into a personal loan scam when applying online — especially when searching for loans for bad credit.