Banks vs. Online Lenders— How do they compare?
Taking out a personal loan from a bank versus an online lender can be a difficult decision. It is not that one is better than the other. One may just be more suited to you. Choosing the right lender is tough, especially for someone new to banking and borrowing. Below are three main differences between taking out a personal loan from a bank vs. an online lender.1. Interest Rates
Banks offer lower interest rates due to their rigorous application processes. While borrowing from a bank may be cheaper, it is less convenient. Online lenders provide personal loans, sometimes with a higher interest rate, yet they offer a more accessible product when compared to traditional banks.2. Application Process
Banks require a lot more time and attention from borrowers. Due to stringent regulations, the application process becomes more challenging, leading to longer loan approval times. Your bank may also ask to see you in person, which could be inconvenient. The application process for taking out a personal loan with an online provider is designed to be quick and efficient, typically taking less than 10 minutes to complete the application.3. Approval and Regulations
Online lenders have more flexibility when determining the borrowers they will work with. Conventional banks frequently turn down individuals whose credit score falls below a certain level. Many online personal loan providers can consider and work with various credit scores. Applicants approved by online lenders will often see the funds deposited into their accounts within 24 hours.
Choose the easy option!