Is it good to apply for a personal loan online?

The traditional way to apply for a personal loan is to visit a bank and fill in an application form. You can also often call up a lender to apply for a personal loan over the phone. You’ll need to provide a few details to prove your identity, income, expenses, assets and liabilities to ensure you can afford the loan’s repayments. 

Additionally, the lender will conduct a credit check to get a better idea of if you’re a responsible borrower. You can access your credit scores for free before you consider applying for a personal loan to get a better idea of how lenders see you. If your credit score is on the low side, you may be able to take steps to improve your credit before you consider applying for a personal loan.

Both traditional and online lenders often offer the opportunity to apply for a personal loan online. This often means you can start your application when you choose (rather than when branches and call centres are open) and may be able to start the application, pause, and return at a later date.

You’ll still need to provide documents as part of an online mortgage application, though the process may be a little different. Rather than handing copies of the documents over to a bank teller, you may instead be able to scan or even photograph the documents and upload the digital files to the lender via a secure app or email address.

Applying for a personal loan online may only take 10 to 20 minutes. Depending on the lender and your application, your personal loan may be approved within the hour, and you could see the money in your bank account within a couple of business days.

Most banks and lenders will let you apply for a personal loan online. This includes retail banks and mutual banks, such as credit unions and building societies.

There are also some specialist online-only lenders in Australia that offer personal loans. Because these lenders don’t need to manage the overhead costs of building and maintaining a network of branches, ATMs and more, they can often focus on providing credit products (including personal loans) with competitive interest rates and fees.

It’s important to compare personal loan options from a variety of different lenders to get a better idea of which ones may best suit your financial situation and personal goals. For example, an online lender may be able to offer a more competitive interest rate and cheaper fees. 

However, a larger lender may be able to bundle other financial products with their personal loan, or offer access to extra features and benefits that could help to enhance the overall value their personal loans offer. Comparing the Real Time Ratings™ at RateCity could also help you get a better idea of the overall value that different personal loans offer.

There is always a risk involved when providing personal and financial information over the internet. Being careful with how you use your details could help to minimise this risk, allowing you to apply online with confidence. Watch out for the warning signs of a possible scam, and always check any communication from a lender.

Banks and online lenders need to be registered with the Australian Securities and Investments Commission (ASIC) to operate legally in Australia. Checking the company’s details on the relevant ASIC register, or looking up their Australian Credit License (ACL), can help you confirm that the lender complies with the regulations that help to protect Australian finance customers, their money, and their personal details.