The consumer lending industry has seen significant changes in recent times due to technological advancements. Most people now find it easy to access financial products with the help of technology rather than using the conventional application process. Lenders now provide entirely paperless loans through online applications. However, the offline mode of personal loan application is still present. People still apply for credit by visiting the office of the lender.

 Let us now look into the difference between online personal loans and offline personal loans. 

Let us discuss the merits and shortcomings of both these application modes and find out which one is best suited for the new age consumer. 

Accessibility of Loans 

If you want to take a personal loan offline, you will have to visit the bank or the lender physically and submit some forms along with the required documents. This is applicable even after you conduct your initial research online. However, in the case of an online personal loan, you can do the entire process from start to end on the internet. You can fill up your application form and submit documents digitally. The amount will be disbursed to your bank account through online transfer. Also, you have multiple options readily available. 

Also Read : CIBIL™ Score for Personal Loan

Human Interaction

In the case of online personal loans, all the processes are done online and human interaction is negligible. In the case of offline personal loans, you will have human interaction. Offline personal loans will give you a personal touch as you can interact with the bank or company officials. While this may not be a great option for digitally savvy millennials, it is convenient for quite a number of people.  For an online personal loan, you can apply for it anytime. You do not have to meet anyone and no personal interaction is required. You can use it as a quick solution when required.  


The documentation process involved in offline personal loans can be quite a lot and much overwhelming. In online personal loans, the documentation is very minimal. You are only required to upload the basic set of necessary documents digitally. 

Processing Time

There is a big difference in processing time between an online and an offline application. For online loan applications, the loan can be approved quickly. With leading NBFCs, your online application can be approved instantly. Moreover, the loan disbursal is also very quick. However, for an offline application, the documents will have to be submitted in person, and they will be verified before the loan application is approved. This means that it will take a little longer than online processing. Make the most of the altering face of technology and choose a convenient, hassle-free method when applying for a loan. When you compare both, you will understand that choosing an online loan is much easier and quicker.   

Comparison of Products

For online loans, you can compare multiple loan products simultaneously via the information present online. This will help you choose the best loan product suitable for you. But, for offline loans, this process is cumbersome. You have to go to the branch offices of all the lenders and ask for their information. 


The personal data furnished online is highly secure as most lenders follow best practices with regard to online security. The risk of losing crucial paperwork is high in the case of offline loans.

Also Read: Personal Loan Interest Rates

Added Benefits 

There might be a lot of value-added services such as reports, discounts, deals, etc with respect to online loans. You can not only save money but also have the privilege of enjoying some more benefits. You may notice that the same company or bank you bought an offline loan from, would have a lot of extra benefits for their online personal loan. With an offline loan, there may not be a lot of added benefits and value-added services. 


For offline loans, particularly when you contact an external agent for a personal loan, there is the risk of misinformation, insufficient information, and bias. The agent may try to push for products that benefit them. For online loans, you do not have to depend on another person. You can do all the research by yourself, can easily compare loans, and compute EMIs on the official websites of lenders. You can do everything with ease and at any time. 


While online personal loans are growing in popularity, there are many people who still prefer offline products. The convenience associated with online personal loans cannot be matched by offline products. Hence, it is popular among working professionals in urban regions and it is expanding continuously.  Online personal loans are the best way when you want the loan processing time to be less and documentation to be minimal. Also, when you want to compare different options available before choosing the best, online personal loans provide you with the luxury of comparing different options available before choosing the most suitable one for them. On the other hand, people opt for offline personal loans due to the face-to-face interaction one gets along with the personalized service. 

FAQS of Difference Between Online Personal Loan And Offline Personal Loan 

1:What is an offline personal loan? 

This is the traditional way of applying for a loan. In offline loans, the applicant must go to the branch office and fill out the necessary forms to apply for a personal loan.  All the required KYC documents must be submitted as hard copies and the company may take a lot of time to process these applications. 

2:What are the disadvantages of online loans? 

The disadvantages of online loans are that because the loan is unsecured, the interest rate may be much higher than traditional bank loans, the loan amount may be much lesser, and there is always the risk of hacking and scams. 

3:What are the benefits of online loans? 

The benefits of online loans are, 24/7 availability,minimal documentation, no submission of hard copies. Small cash loans, quick disbursal, and faster application process. 

4: Is it better to apply online for a personal loan? 

Online lenders usually provide faster approval times and disbursal speeds than banks and credit unions. Borrowers who submit an application online may receive money on the same day.