How to Get an Online Loan from Your Bank
- Make sure you meet the requirements: Some banks may have requirements that you hold a certain type of account or have been a customer for a certain amount of time. Make sure you’re eligible before you apply.
- Check your credit: So it won’t be a surprise, look up your credit score at AnnualCreditReport.com. It’s free and won’t impact your credit. If there are any errors on your credit report, dispute them immediately.
- Pre-qualify: Many banks that offer online loans will allow you to pre-qualify online. Because this only requires a soft credit check, you’ll be able to see an estimated rate for your loan without damaging your credit.
- Compare rates with online lenders: Online-only lenders may be able to offer you a lower rate than your bank because they have lower operating costs. Pay attention not only to the APR, but also make sure the monthly payment is affordable and there are no prepayment penalties.
- Fill out the online application: In addition to providing your social security number, you’ll likely need to submit proof of income and give your bank account information.
- Wait for the money: If you’re approved for the loan, some banks offering online loans will be able to get the money to you on the same day or the next business day.
Traditional Bank Loans vs Online-Only Lenders
Even though many traditional banks offer loans online, there are some key differences between traditional financial institutes and online-only lenders. First, when you work with an online lender, you’ll need to be comfortable doing everything online. You won’t be able to visit a branch for in-person assistance. There are far more advantages to using an online-only lender, however. These lenders utilize technology to simplify and shorten the application process, so you can sometimes get your money faster. And because online lenders don’t pay rent for physical spaces or hire as many employees, they may able to pass on the savings to you in the form of a lower APR. An online-only loan won’t always be a better deal than an online loan from your bank, however. If your bank allows online pre-qualification, you should take advantage of the opportunity to compare rates across a few different lenders.Can You Get a Bank Loan with Bad Credit?
Bank loans are typically only an option for people with good or excellent credit. But that doesn’t mean you should turn to alternative financial products like payday loans, title loans, and pawn shop loans. You may be able to negotiate with your bank if you’ve been a long-time customer with a positive banking history. There are also several alternatives to bank loans if you have a subprime credit score:- Credit Unions: Credit unions are member-owned financial institutions that are not for profit, so they are often less strict about approvals. It’s possible to get approved for a loan at a lower rate than you could get at a bank. However, credit unions have membership requirements before you can get a loan. In some cases you just have to join, but in other cases you may be required to maintain membership for several months.
- Family and Friends: While it might seem difficult, you shouldn’t be afraid to ask for financial help from your friends and family members. You can write up a loan contract and plan for prompt repayment to avoid destroying the relationship. And once you’re on solid financial footing, you can offer to help someone else in a time of need.
- Co-signers: If you apply for a loan with a co-signer, your bank or online lender will use their credit score when determining your interest rate. However, if you default, it will hurt your co-signer’s credit. Make sure you have a plan to repay the loan before asking a creditworthy friend or family member to cosign for you.
- Online Loans: Some online loans are targeted at people with bad credit or no credit history. For example, you can get an installment loan online without a credit check. Just keep in mind that loans for bad credit borrowers come with much higher interest rates than traditional bank loans.
- P2P Loans: With a peer-to-peer loan, an investor lends money to you through an online platform, and you pay them back at a fixed interest rate. Most P2P loans require a credit check but have less stringent requirements than traditional banks.
- Home Equity Loans: If you have equity in your home, you may be able to borrow against it. You’ll still need fair credit to be approved, but since the loan is secured by your home, you may be able to get better rates with a lower score.
- HELOC: A home equity line of credit is another way to borrow against the equity in your home. It’s a revolving line of credit that allows you to borrow what you need when you need it. They tend to have fewer closing costs but come with variable rates. You’ll make interest-only payments during the draw period, which is appealing if you need a long time to repay the loan.