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Applying for an Auto Loan Online or In-Person: Which Is Better?

Applying for an Auto Loan Online or In Person?
Sulaiman Abdur-Rahman
Sulaiman Abdur-RahmanUpdated February 14, 2025
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
You can apply for an auto loan online or in person. Some consumers prefer to apply online for convenience, while others may prefer to apply in-person at a local financial institution. Your personal preferences dictate whether it’s better for you to apply for a car loan online or in person.

What Is an Online Auto Loan?

An online auto loan is a car financing agreement that a lender offers over the internet. Consumers may apply for an online auto loan using a computer, tablet, or smartphone. Fintech companies may offer online car financing, including online auto loan refinance options. Banks and credit unions may also offer online financing, including auto loan refinance online options.The way car loans work is that lenders provide financing to help borrowers purchase a new or used vehicle. Borrowers are expected to repay the car loan over a set term, and these loans may include interest charges.An online auto loan is simply an auto loan financing agreement between an online applicant and financial institution. Approved applicants may sign the car financing agreement online and make online payments toward principal and car loan interest.

Pros of Online Auto Loans

Below we highlight some of the pros of online auto loans and online auto loan refinance options:

Interest Rates

Consumers may compare interest rates online when shopping for car loans. Comparing interest rates online can help you find car loan financing that’s right for you, including online auto refinance loan options.

Convenience

Online auto loans can provide you with the convenience of getting car loan financing without having to apply in person. Applying for online car loans or online auto loan refinance options may be faster than applying for in-person financing at a local bank. You can also make car loan payments online, including paying off a car loan early if you wish.

Quicker Approval Process

Completing an online car loan application can take minutes, and lenders may offer car loan preapproval within seconds. This process can be much quicker than applying in person. Auto loan refinance online applications may also receive quicker approval than traditional refi applications submitted in person.

More Options

Online lenders may give you more options for finding and comparing car loans. Having more options at your fingertips may help you find the car loan financing that’s right for you. More options may also be available to you if you’re looking to refinance an auto loan online.This can benefit you in the following ways:Recommended: How Much Does It Cost to Refinance a Car?

Cons of Online Loans

Below we highlight some of the drawbacks to online auto loans and online auto loan refinance options:

Unreliable Lenders

Certain lenders — including some that offer online auto refinancing — may not be as reliable as top financial institutions with in-person services.

Wide Range of Interest Rates

Lenders may offer online car loans with a wide range of interest rates that may not be right for you. Some online lenders, for example, may offer subprime auto loans with higher interest rates than traditional auto loans.

What Is an In-Person Auto Loan?

An in-person auto loan is car financing offered at banks, credit unions, car dealerships, or other financial institutions with a brick and mortar presence. You can apply for the loan in person and may get approved for direct financing to buy a new or used car.There are different types of car loans that you may apply for in person, including the following: 

Pros of In-Person Auto Loans

Below we highlight some of the pros of in-person auto loans:

Personalized Service

You can meet directly with a loan specialist and receive a personalized service when applying for an in-person auto loan. The meeting can take place in a formal office setting at a bank, credit union, or other financial institution.

Information Security

Applying for an in-person auto loan can include a high layer of information security by placing the applicant in a private office setting at a regulated financial institution. Applicants can work directly with a loan specialist during the application process when presenting proof of identity in person.

Ability to Negotiate

Meeting with a loan specialist in person may give you some ability to negotiate for better loan terms. Applicants may negotiate for a lower interest rate on a new car loan or used car loan.

Cons of In-Person Auto Loans

Below we highlight some of the drawbacks to in-person auto loans:

Lack of Convenience

Perhaps the biggest drawback with in-person auto loans is the lack of convenience associated with having to meet with a loan officer in person during regular business hours. The process of going to a financial institution in person and presenting proof of identity in person can be more time consuming than applying for an online car loan.

Is It Better to Apply for an Auto Loan Online or In-Person?

Your personal preferences may dictate whether it’s better for you to apply for an auto loan online or in person. You may face certain pros and cons when you apply for an auto loan online or in person. Submitting an online application may be right for you if your main concern is convenience and speed.Some consumers who apply for a car loan online or in person may be more concerned about having a satisfying experience. An in-person auto loan may be right for you if you prefer human interaction. An in-person auto loan may also be right for you if you distrust online systems and want to avoid submitting personal information online.

Tips for Applying for an Auto Loan Online or In-Person

Here are some tips when applying for an auto loan online or in person:

Compare Competitors

It can always be a good idea to compare competitors when shopping for car loans. Comparing terms and conditions from a variety of lenders can help you find auto loan financing that’s right for you.

Understand the Fees

Auto loans and auto refi loans may include certain fees, including application fees or origination fees. The annual percentage rate or APR that a lender offers may reflect all finance charges, including the interest rate and upfront fees. Understanding such fees can help you evaluate the true cost of a loan offer.

Stick to Your Budget

Sticking to your budget can help you avoid borrowing more money than you need to buy a new or used car. Borrowing the least amount of money you need to buy the car that’s right for you can promote ownership equity. Exceeding your budget can make it harder for you to avoid an upside down auto loan. An upside down auto loan is a situation where your outstanding car loan debt balance is greater than the resale value of your financed vehicle.

The Takeaway

You may get approved for an auto loan whether you apply online or in person. If you’re unhappy with your current car loan, Lantern by SoFi can help you find the auto loan refinance terms that are right for you.  Compare auto refinance rates with Lantern.

Frequently Asked Questions

Is it better to apply for an auto loan online or in-person?
What are the differences between applying for an auto loan online and in-person?
Is it faster to apply for an auto loan online or in-person?
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About the Author

Sulaiman Abdur-Rahman

Sulaiman Abdur-Rahman

Sulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and served as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.
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