African American couple researching online loans.

Are Online Loans Safe?

Online loans can be a convenient option for getting the money you need to cover expenses quickly. As long as you apply with a legitimate lender, online loans are safe and reliable.

So, where do you go for a safe online loan? What do you need to watch out for?

What are online loans?

The only difference between an online loan and one you apply for in person is the application process. Rather than visiting the lender’s physical location, you can complete the application process online. If approved, the lender will deposit your loan funds directly into your bank account.

What types of loans can you get online?

There are a range of safe online loans available, including:

Payday Loans

Also known as a Cash Advance, a Payday Loan is a small loan that can pay for immediate expenses or emergencies. Depending on your income and state availability, Payday Loan amounts are typically no more than a few hundred dollars. That’s because they are designed to be repaid in full on your next payday.

Installment Loans

If you need more cash than you can get with a Payday Loan, an Installment Loan might be a good option. Installment Loan amounts are larger, making them perfect for medical expenses, home repairs, and similar costs.

Lines of Credit

If you prefer a more flexible type of financing, consider opening a Line of Credit. A personal Line of Credit is a revolving credit line that gives you access to funds for emergencies, home improvements, car payments, and more. You simply withdraw whatever amount you need, as needed, up to your credit limit.

Pros of online loans

Safe online loans offer a variety of advantages, including:

Convenient online application process

You can apply for an online loan anytime from the comfort of your home. Online loan applications are typically quick and easy, requiring you to provide basic information such as your contact information, Social Security number, and income and banking information.

Easy to compare loan offers

When researching multiple online loans, it’s easy to compare the offers you receive. You'll be able to determine which loan is the best choice for your individual budget, needs, and preferences.

Quick access to funds

Upon approval, most online lenders distribute the funds to your bank account within 24 hours. You may even be able to collect the funds the same day you apply!

Pre-approvals with soft credit inquiries

Online lenders often offer pre-approvals. This means you can determine your eligibility for a loan with a soft credit inquiry. Unlike a hard credit inquiry, a soft credit inquiry will have no effect on your credit.

Good credit isn't always necessary

All credit levels are eligible to apply. You could still get approved for a safe online loan even if you have bad, fair, or no credit. Start the application process for an Advance America loan to find out if you're eligible!

Cons of online loans

As with most loan products, there are a few drawbacks to online loans, such as:

Lack of trust or reputation

Not all online lenders are trustworthy. In fact, scammers often pose as reputable lenders to deceive borrowers. This is usually the case with auto loans, not personal loans, but it’s worth mentioning. Loan scammers might use false caller ID numbers, fake company logos, and other tactics to gather your personal information or money.

Data sharing

When you apply for an online loan, you provide personal data such as your name, address, and Social Security number. A loan broker may share your information with other companies.

Ongoing lender contact

Once you apply for an online loan, you might continue to receive emails or phone calls from the lender.

How to get a safe online loan

While online loans do come with some risks, there are a few ways to reduce them and avoid scams. Here are some steps you can take to protect your confidential information.

Research lenders

Don't settle for the first online loan you find. Take the time to research different lenders.

Look out for scam websites

Once you visit a potential lender's website, look for signs that may indicate they're a scammer. These signs might include:

  • Spelling and grammar errors.
  • No address or a P.O. box instead of a physical address.
  • Lack of an “s” after “HTTP” in their site address.
  • Missing “lock” in the address bar.

Any of these should be considered a red flag.

Check for proper registration

Just as you wouldn't hire an unregistered plumber or roofer, you shouldn't apply for a loan from an unregistered lender. If you're uncertain whether a prospective lender is registered and licensed, check with the banking regulator in your state.

Use encryption software

Encryption software can encrypt data to keep sensitive information secure. You may want to download a version for personal use to prevent scammers and unauthorized users from accessing your information.

Check online reviews

Reading online reviews about your lender can help you gauge whether their online loans are safe. Google is an excellent place to start, as Google reviews will tell you all the positives and negatives about a particular lender.

Trustpilot is another trusted review site. In addition to our outstanding Google reviews, Advance America also has a 4.8-star Trustpilot rating.

Things to keep in mind

A legitimate lender will never ask you to pay fees and interest before you receive the loan. If the lender is too forward or aggressive with their loan offers, you may want to steer clear.

When doing your research, it’s important to remember that if a loan sounds too good to be true, it probably is. Always verify the loan terms and conditions before applying and again before signing the loan agreement.

Apply for a safe online loan with Advance America

Whether you need an Installment Loan, Payday Loan, or Line of Credit, it’s nice to know Advance America has been a reputable lender for more than 25 years. Compare our options and apply for a safe online loan today.

Notice: Information provided in this article is for informational purposes only. Consult your attorney or financial advisor about your financial circumstances.

Jalin Coblentz headshot About the author

Jalin Coblentz has contributed to Advance America since 2023. His experiences as a parent, full-time traveler, and skilled tradesman give him fresh insight into every personal finance topic he explores.

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The Advance America advantage

Since 1997, Advance America has helped millions of hardworking people with a variety of financial solutions including Payday Loans, Online Loans, Installment Loans, Title Loans and Personal Lines of Credit.
157+ million
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800+ stores
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25+ years
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