How Do Online Loans Work?

By Jason Ramin

As humans, we don’t really enjoy change. Remember when companies came out with ebook readers? People were either very excited about the prospect of downloading hundreds of books onto one device or mortified at the thought of not reading an actual bound and printed book ever again. Well, the fad died down a bit, and hard copy books are still around.

That’s just one example pertaining to the reality that we live in a digital age. And for better or worse, there are going to be processes and practices that will/already have switched over to mostly occurring online.

Banking is an excellent example of this. Whereas you used to have to make the trip to your bank to check the status of your account or to withdraw or deposit money, you can now do that from the comfort of your own home. And it’s the same with loans. Money loans online are very common today.

Keep reading to learn more about online loans, what they are, how they work, and how you can get one, as well as some of the pros and cons associated with online personal loans.

What Are Online Loans?

Online loans are personal loans that can range from $1,000 to $35,000. The specific loan amount that you can acquire depends on your credit, as well as your state’s loan laws and regulations. Personal loans can also include signature loans, which don’t require collateral and only need your signature to accept the loan offer.

Depending on how good or bad your credit score is, an online loan is a great option to consider if you need large amounts of money quickly. This is a pretty remarkable development considering that just a few years ago, it was almost impossible to get a loan online without going to a bank or credit union.

How Can I Get a Loan Online?

Getting online personal loans is fairly straightforward. You simply search for online personal loans, select where you’d like to get the loan from, and fill out any necessary paperwork. The next step is where your credit score--good or bad--comes into play.

The lender you are petitioning to get an online personal loan from will conduct a credit check to establish your credit lending worthiness. If you have a good history of paying off loans and debt, you’ll likely be approved for a higher loan. If you have a bad history, your chances won’t be as great, but you’ll most likely still get a loan of some sort.

You’ll be able to get your loan upon completion of the credit check.

Getting an Online Loan: Pros and Cons

There are positives and negatives associated with online loans. Before jumping straight in and completing an online loan request, take a look at the following list of pros and cons:


  • Convenience: You can literally fill out a loan request online while sitting on the couch. It doesn’t get much more convenient than that.
  • Better Rates: Online loan approval companies aren’t paying extra fees that come with having an actual brick and mortar location. As such, their rates are likely to be lower. The overall rate still depends on your credit score, but the baseline starting point is typically better than what you’ll find at a bank.
  • Quick Loan Decision: If you need a loan fast, online personal loans are the better bet for you. They’re more likely to happen quickly, getting you the money you need faster.


  • Security: Entering sensitive and private information online is always a risk, so be aware that there are some security concerns associated with getting an online loan.
  • No personal interactions: With online personal loans, you don’t get face-to-face customer interactions. This also means you don’t get the positive assurance that comes from talking with a representative in person.
  • Technical challenges: Typical money loans online use user-friendly websites and interfaces that make applying for and receiving a loan easy. But simply by the nature of doing something online, you may find yourself frustrated by receiving multiple error messages, your request timing out, or other technical annoyances.

Learn More About Online Loans

Personal Loans is a safe, reliable place to submit a request for online personal loans. We work with customers to help them get the loans they need and deserve. Learn more about your online personal loan options today.