3 Ways to Get a Loan Online

Over the last decade, more and more people have started using the internet for everything. So, it makes sense that people would start looking for ways to get a loan online. And in response to the demand, many different services have answered the call — from peer to peer lenders, to payday lenders. If you’re looking for a loan online, here are some places to start.

Traditional Banking

Many banks have started moving their full suite of services online. In fact, there are several banks that are all online, such as Everbank and Ally Bank.

Cash or Credit

These banks offer many traditional lending services, such as auto loans and home loans, but do it from the convenience of the internet. If you are looking for a traditional loan online, this can be a great solution for you.

Peer to Peer Lending

Peer to peer lending has become extremely popular because it is other individuals loaning money, not institutions.

As a result, there are no lending standards that have to be met, or other qualifications. Instead, most borrowers put together a post (like an eBay ad) that highlights what the money will be used for and why they would make a good borrower.

The company then vets the borrower, and puts together a credit score for the lenders to see. Lenders then bid on the loan, and if it gets funded, the company will handle everything.

This is a great alternative for borrowers who many not have the best credit, or are going to be using the loan for a non-traditional reason. Many of the borrowers on these sites are looking to start businesses, or are looking to consolidate their debts. As such, these loans are a bit more risky than traditional loans.

There are two main players in the market – Prosper and Lending Club, and several smaller ones. However, these companies are booming in the lending market. It was recently announced that Peer to Peer Lending Crossed $1 Billion in Loans Issued, as reported by Tech Crunch and the SEC. That is a lot of money changing hands online.

Alternative Lenders

Finally, alternative lenders are getting into the online space as well. For example, there are many payday lenders that offer personal loans online and send you money almost immediately. Some lenders require documents to be emailed or faxed in, but since the internet is about convenience, many lenders have opted to avoid the extra hassle and streamline the process.

A popular alternative, and one that I’ve recently seen a large push from to enter the online space, has been online pawn shops. They’re letting customers mail in certain items (like electronics), while offering short-term loans or the option to buy your item outright.

While the online and technological era continues to push forward, things are evolving at a rapid rate. There are now more options than ever for people that are looking for a short-term solution to their financial woes and it has provided wonderful opportunities for people that are looking to finance start-up businesses. While I haven’t applied for any loans in the last few years, I have heavily considered investing in the Peer-to-Peer lending market. The returns have just been impressive!

Picture by FreeDigitalPhotos.net

About the Author

By , on Jun 6, 2013
Andy Tenton
Andy is a 30-something New Yorker who turned his financial life around. He took charge of his finances, got out of debt, and is now working his way toward financial success. He is the publisher of WorkSaveLive.com.

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{13 Comments}

  1. Pete says:

    Banking is becoming just like any other form of making purchases of products or services, an increasing amount is being done online. Companies can cut costs by using the Internet to sell, and some are cutting back on their bricks and mortar side of the business, especially where staffing is concerned. This is why some loans are cheaper when taken out online, the savings are passed on to the customer.

  2. These days, you can conduct any type personal business online, and applying for loans is one such example. It’s great there are non-traditional ways to make loan requests that don’t involve the standard face-to-face interviews or submitting a slew of financial documents in order to apply.

  3. A Blinkin says:

    Payday lenders and online loans are probably the sketchiest transactions one can enter into.

    Having said that, P2P lending interests me. I think it’s a neat idea to cut out the “middle man.”

  4. Andy Hough says:

    I’ve had some luck investing in loans on peer to peer lending sites. If I needed a loan I’d consider getting one from a P2P site but I would probably be able to get a better deal from one of my credit cards. I try to avoid debt though so I probably won’t get any loans.

  5. This is a very interesting compilation! With peer-to-peer lending, do you think the loan sharks can break digital kneecaps if the loans don’t get paid?

  6. Mich says:

    These loans online don’t come cheap, the best thing to do is to build up an emergency fund in order to fight off unexpected expenses for as long as possible before having to borrow.

  7. Katie says:

    I think online banking is the most appealing. That would be my choice for an online loan. I do find the peer to peer lending to be very interesting. I think I’d rather invest in than get a loan through it.

  8. AverageJoe says:

    I’ve also seriously considered the P2P lending market. The returns look good and you can diversify your risk among many borrowers.

  9. I absolutely love online banking and am surprised that more people aren’t online! It’s so convenient and it’s 24/7. You can’t beat that.

  10. I have been reading a lot about peer-to-peer lending and this is something I am really considering. If you loan to a bunch of different borrowers it’s a great way to diversify your portfolio.

  11. Michelle says:

    I agree with previous comments. I actually do remember the last time I was in a bank. It wasn’t for anything banking-related really; I just wanted to switch the picture on my debit card. Pretty silly, I know.

    This is very informative about the different types of loans available, Andy. I’d never heard of some of these types, like Alternative Lenders. Very interesting. Not sure I’d want to mail something in to a pawn shop, but I know that there are very valid reasons for people to need this type of service.

  12. I’ve been doing online banking and investing for years – in fact, I can’t remember the last time I was in a real bank. Fortunately, I have never had to apply for one of these types of loans. However if I needed one, I think I would check them out providing the interest rate was enticing.

  13. In my opinion, everyone who really wants to market themselves and gain greater exposure SHOULD be online. It’s 2012 people! LOL. Update your websites. Create one. Market yourselves.

    There are a ton of resources online, so most people who will be looking for loans will stop at looking online if they find a deal they like or a rate that they believe is unbeatable.

    I was looking into private loans for school vs. federal loans, but the benefits of getting the federal loan outweigh the private loan with the variable lower rate.

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