Everything is online these days—including personal loans. Online lenders make it easy to compare rates and terms and find the right online personal loan for your situation.
Personal loans were the fastest-growing category of consumer debt in 2019, according to a survey from J.D. Power—and the internet has made the loan application and lending process easier than ever.
In all, 40% of personal loan customers in the survey applied entirely online, and those customers had the highest overall satisfaction. They were also more likely to indicate that they understood the entire application process. If you’re looking for a fast, easy, and understandable loan application an online personal loan could be right for you. But before you act, it's important to know exactly how these loans work, what the advantages are, and how to apply for one.
An online personal loan is a personal loan that you can get online.
One of the primary benefits of online personal loans is their versatility. You can take out a personal loan to meet emergency expenses, open a small business, consolidate debt, and more.
Personal loans in general—including online personal loans—are increasingly popular. According to the US Chamber of Commerce, 19.1 million Americans had an unsecured personal loan at the start of 2019. The total value of those loans was $143 billion, which was nearly double the $72 billion seen in 2015.
The flexibility that a personal loan provides has become all the more valuable during the COVID-19 pandemic. Millions have experienced economic hardships that may have made it difficult to pay bills or meet other expenses. An online personal loan could help plug budget gaps, and the streamlined application process allows consumers to get their money more quickly. Some respondents in the J.D. Power survey reported receiving their funds in as little as two days.
When talking about the concept of online personal loans, it's important to touch on the differences between secured and unsecured loans:
There are many advantages to online personal loans. You can make the best use of your loan if you know the benefits.
Rates and terms will vary depending on your credit score and other factors, but online personal loans can offer you competitive rates. Because they have fewer overhead costs, they can pass those savings onto the consumer by offering lower rates than brick-and-mortar bank lenders.
Online lenders typically offer pre-qualification that doesn’t affect your credit—and have fast approval times. When you need money in a pinch, an online personal loan could offer you the quickest pathway to financial support.
Online personal loans are popular because the experience tends to be more efficient and user-friendly than the traditional loan process. You can easily compare multiple lenders at the same time and apply whenever you’re ready.
In general, the main steps to getting an online person loan are the same as applying for a personal loan with a bank:
Beyond that, there are some other pointers to keep in mind. Doing so will help you find the most suitable loan for your needs:
Ready to take the next steps toward finding an online personal loan? Compare rates and terms to find the right online personal loan for you with our help.