Applying for a personal loan online is fast and convenient. Plus, it makes it easier to compare different options from a wide variety of Canadian lenders.

However, applying for a personal loan online doesn’t necessarily guarantee the best offer nor does it mean you will get your money faster.

What is an online personal loan?

An online personal loan is — quite literally — a personal loan that is applied for, funded and managed via an entirely digital process.

In decades past, you might have had to go to your bank or other financial institution in person to inquire about a personal loan and see if you could be approved.

Now it’s possible to complete all steps of the personal loan application process online — from the comfort of your home. An added bonus of online personal loans is that you’re no longer limited to big banks — you can also compare loan offers from online-only banks that don’t operate physical branches.

Security of online personal loans

While some may wonder about the safety of applying for a personal loan online it’s important to note that most banks, credit unions and alternative lenders take security seriously. Many Canadian lenders use multiple layers of high-end security to keep your information and finances safe.

However, it is still up to you to protect your sensitive financial information. Keep things like your login and password safe, use only trusted computers and mobile devices, and educate yourself on malware and phishing techniques so you can avoid them.

How to apply for a personal loan online

One of the biggest advantages of being able to apply for a personal loan online is that you can easily compare multiple options to find the best pick for you. As mentioned above, looking for a personal loan online opens up more options as there are some online-only banks that offer this product.

Since online banks don’t have the same overhead costs as traditional banks, they may be able to offer you better rates. However, your current bank may offer a better deal if you are already a client with several types of open accounts. Again, shop around and compare until you find the best option.

Once you have found the online personal loan that you want to go with, you can usually get started by clicking an ‘apply’ button somewhere on the website. Then, follow the steps as you are prompted.

These steps typically include filling out an application with personal and financial details, signing the loan documents and verifying your income. You will then wait to receive a lending decision and, if approved, get your money.

Where to get an online personal loan in Canada

So, where can you get an online personal loan? Well, there are a couple of options to get you started in your research.

One option is to visit the individual websites of personal loan providers and compare them one by one. This is the slowest method and, again, note that even if a big bank has a webpage dedicated to their personal loan products, they may not allow you to apply online.
A quicker option is to use a comparison website. These search platforms act as a one-stop shop to let you look through and compare options available to you from a variety of Canadian lenders.

Pros and cons of online personal loans

Pros

Easy to compare options from multiple types of financial institutions, including online-only banks.
Accessible from nearly anywhere you have an internet connection.
You can do it on your own time and not have to worry about banking hours.

Cons

Not all lenders offer online applications for personal loans.
If you choose an online-only lender, the loan needs to be taken care of entirely online.
Sometimes you may be able to get a better deal by going in and speaking to a banker in person.

Yes, many lenders have options to apply for a personal loan online, including big banks, credit unions and online-only banks. Many lenders will also let you manage your personal loan online, including payoffs and account closures.

Yes, online personal loan applications are often approved faster. However, the speed with which you’re approved and get the funds depends on your individual lender and the strength of your application.