Can You Borrow Money Safely Online?

By Dawn Minnaar

Director of South African Operations


Money can be tight for all of us sometimes. Although most people work hard and try to cover expenses themselves, often a wedding, a period of slow business or other life circumstances require extra funds. Getting a loan may be the only choice in these situations, and the question is whether to apply for an online loan or to apply directly in person at a bank or other loan agency.

We do almost everything online these days, including shopping, talking to friends, working, banking, and even applying for loans. There are advantages and drawbacks to applying for loans online, and some people may choose to approach their local bank instead, especially if they have a good relationship with their branch. However, there are ways to borrow money safely online if you do research and are careful. 

The downside to seeking online loan resources is that there are many loan frauds that can be vehicles for other types of cybercrime, such as identity theft and money laundering. If you have lost money to one of these schemes or another type of fraud, contact our fund recovery professionals. 

MyChargeBack experts assist clients with broker disputes loan scams and various types of fraud. Talk to MyChargeBack if you have been the target of fraudulent activities or are involved in disputes with merchants or brokers. 

Differences Between In-Person and Online Loans

There are many differences between online and in-person loans aside from the obvious–that some have online applications and others involve people who work at our local bank. However, there are a number of other differences too. 

When you apply for a loan in person, usually a bank, you may be talking to people you have dealt with before. This may be advantageous if you work well with people at your bank, and obviously, a strike against you if you haven’t had good dealings with them. If you are the type of person who does well in job interviews and face-to-face interactions, you might do well to apply in person at your bank if you have decent credit. 

Many people prefer online loans if they don’t work well with their bank or if their credit isn’t terrific. However, it is important to avoid loan agencies that claim not to look at credit rating at all, since that is a common sign of a false loan scheme. The main reason many prefer to apply for online loans is the speed and convenience. Approval is often quicker and recipients receive the money faster. 

However, at least with legitimate online loan companies, people are more likely to be rejected, all things being equal including credit than when they apply in person at a bank. However, at a bank, the process tends to take longer. 

In-Person Loans Pros and Cons

There are many pros and cons involved in applying for a bank loan in person.


  • A positive pre-existing relationship can help
  • Personalized service and thorough explanations
  • A greater sense of security submitting sensitive information in person
  • A longer process is more deliberate and means customers are less likely to settle for uncomfortable terms and conditions
  • Interest rates are often lower for regular bank loans


  • Process takes longer
  • No pre-qualification process that lets you see loan types and interest rates without affecting your credit
  • Costs and overhead involved in working from a physical bank can be passed onto the customer

Online Loans Pros and Cons

The following are advantages and disadvantages in applying for online loans.


  • The process is much faster
  • Pre-approval lets you see terms and rates without impacting your credit
  • Online companies have fewer operating costs and loans can be cheaper


  • Require uploading documents with sensitive information and can cause security concerns
  • Not working with people who know you may make rejection more likely
  • Many online loans have higher interest rates
  • The greater likelihood of being the target of a loan fraud

What to Look for When Applying for an Online Loan

For those who decide that applying for an online loan is preferable to seeking a loan from the local bank, it is important to do thorough research before choosing a loan company and a specific kind of loan. Many loan opportunities look reliable and trustworthy only to turn out to be fraudulent. Follow these steps to stay safe borrowing money online: 

  • Research lenders thoroughly
  • Know the signs of loan scams
  • Use encryption software
  • Read terms and conditions carefully
  • Remember the adage that “haste makes waste

Even if you feel like you need the money soon, do thorough research on a lender before submitting information. Ensure they are accredited and have proper licensing. Don’t merely rely on customer reviews, which may not be legitimate, but look for reviews of the lender from trusted media sources. See who is behind the company, what credentials they have, and how long the lender has been in business. 

Familiarize yourself with the warning signs of loan scams. Beware of loans advertised on social media or through email spam. Only use a service that has a secured website and has an “s” (for “secure”) after http on the web address. Install encryption software can protect your information, and read the terms and conditions carefully before signing. 

Most importantly, do not borrow money out of haste or desperation. If you are in a hurry, you may not put enough time into research and overlook essential details. 

What If You Have Experienced Loan Fraud?

There are unfortunately many online loan frauds that have cost consumers millions. If you have been the target of one of the schemes, it is important to contact a financial services company and seek fund recovery right away.  

Need Fund Recovery? Contact MyChargeBack Experts

If you have lost money to a fraudulent loan company or are involved in a broker dispute, it is important to seek guidance immediately. Consult with MyChargeBack experts and provide information that can help us draw up an intelligence report and speak to regulators and authorities. We can assist investigators and help you with fund recovery.