How to Get a Safe & Low APR Online Loan

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Getting a loan no longer means you need to put on a suit and make a trip to the bank. Today, it’s possible to get a loan online from the comfort of your home or office. Online loans from digital banks often offer lower fees and interest rates compared to traditional banks. 

The right online loan can help you pay off debt, plan a great vacation or cover an unexpected bill. It’s your job as a smart consumer to educate yourself before you choose a reputable loan provider.

We’ve created a quick, easy-to-understand guide to help you find a safe online loan.  

What is an Online Loan?

An online loan is a loan that you receive from a bank, credit union or another lending source that operates online or via an app. The specific process on how to apply for a loan online varies depending on your lender. Reputable online banks can usually issue loans faster than traditional banks because the entire process is done online and is open 24/7.

There are a number of different types of loans you can get online. The most common type of online loan is a personal loan.

Unlike other types of loans (like student loans or auto loans), you can use a personal loan for almost anything. Many people use their personal loans to pay off medical debt or fix their vehicles. You can also use a personal loan to fund a dream vacation, do home repairs or consolidate credit card debt. 

How Do Online Loans Work?

First, you’ll need to research reputable banks and lenders in your area. Not every online bank may issue loans in every state, so double-check that your digital bank offers service in your area.

Most banks require you to open an account before you can apply for a loan. You’ll need to submit your personal information when you open your account. Under the Patriot Act, you’ll also need to verify your identity using a valid photo ID. A state-issued ID card or driver’s license, military ID and passport are all valid forms of identification.

Some online banks may require you to have more than one form of photo ID when you open your account. You may also need to verify your address by uploading an old pay stub or utility bill that has your address listed. Having these documents in order before you open an account can speed up the process.

After you open your account, you’ll apply through the bank’s website or mobile app. Once you’ve submitted your application and it’s approved, the bank will most often deposit the money directly into your account. 

This is the most basic, general process you might see when getting an online loan. The specific steps you’ll need to take will depend on your individual bank. 

Loan amounts

Most banks have limitations on how much money you can borrow — especially if you’re taking out a personal loan. Personal loans are unsecured, which means they aren’t backed by collateral. Unlike a mortgage or an auto loan, the bank can’t repossess your home or car if you don’t pay back your loan. 

Your bank may also have a minimum amount of money you need to take out to get a loan. Individual minimums and maximums vary by bank. Learn more about your bank’s requirements before you get started. 

Interest rates

In exchange for loaning you money, banks charge interest on your loan that builds over time. Banks list your interest using annual percentage rates (APRs).

An APR is the percentage interest that your loan builds over the course of a year. For example, if you borrow $1,000 at 10% APR, your loan builds $100 in interest over the course of a year.

Most personal loans carry APRs of between 6% and 36%. Online banks often have lower rates than traditional banks, so you may be able to get a loan for less than 6% APR. The average personal loan has a rate of just over 17%.

However, keep in mind that the amount you’ll pay in interest usually depends on your credit score. If you have bad credit or no credit, you may end up paying much more than 36% each year.

Pay careful attention to your APR when you choose an online bank, because high rates can make it much more difficult to pay back your loan. 


After your account is open, you’ll follow the directions listed on the online bank’s app or website to submit an application. You may need to undergo a credit check or income verification before you can get your loan. After you submit your application, your bank will let you know if you’re approved or denied.

If you’re denied, you may need to consider different loan options or improve your credit score before you apply again. 

Once your application is successful, create a plan for paying your loan back over time. Understand your monthly minimum payment requirements, interest rate and when your monthly payments are due. You may also want to sign up for automatic bill pay to make sure you don’t miss a payment.

Paying the loan off

It’s easier to pay off an online loan than it is a traditional loan because all online banks accept payments from their website or mobile app.

When you finalize your loan, your lender will tell you the terms of your loan (including when payments are due and your APR) as well as how much you should pay per month. Online loans may have early repayment fees, which charge you if you pay the loan off too early.

Planning to repay your loan ahead of schedule? Make sure your loan doesn’t include this clause in the contract.

Your online bank may allow you to schedule automatic payments through your corresponding account. However, this option varies by bank.

Benefits of Getting an Online Loan

Online loans offer a number of benefits over loans from traditional banks.  

Speed and convenience

Online banks have mastered the loan streamlining process. Instead of going to the bank, applying for a loan and waiting for outsourced underwriting, you can apply for an online loan directly from your computer or phone.

Online banks may even use algorithmic application review — which means that you can get a decision on your request in as little as a few minutes.

Online banks also make paying back your loan much simpler. Because you have an account connected with your online bank, most digital banks allow you to schedule your payments from your checking account. This means that you can pay back your loan with as little as a few clicks on your computer or taps on your phone.

Credit building

Do you want to build up your credit score? One of the best ways to build credit is by taking out a small, low-interest personal loan and making regular, on-time payments. Unfortunately, traditional banks may not give you a credit builder loan if you have bad credit or no credit.

More and more online banks are ditching the credit score requirement and offering credit builder loans without a score check or inquiry. For example, some banks allow you to take advantage of credit builder loans without taking out a ton of money or submitting a credit score check.


Low APR loans have one obvious benefit over higher APR loans — the lower your interest rate, the less your loan costs.

Online banks don’t need to spend money maintaining their physical branches, so they save more in operating costs. This allows them to extend lower fees and interest rates to all customers. 

Amounts vary

The specific amount that you’ll qualify for in a personal loan depends on your lender. Some lenders limit the amount of money you can borrow in an unsecured loan by credit score, others have hard limits everyone must follow.

It’s a good idea to have an idea of how much money you need to borrow before you start searching for lenders. This will help you quickly narrow down your choices. 

How to Get an Online Loan with MoneyLion

Are you looking for a fast and simple way to get an online loan? MoneyLion has streamlined the loan process into two easy steps. 

Become a MoneyLion Credit Builder Plus member

To qualify for a low APR personal loan, you’ll need to be a member of MoneyLion Credit Builder Plus. Go to the Google Play or the Apple App store and search for the MoneyLion app. Enter your phone number, input the verification code you receive and follow the in-app steps to open a MoneyLion account. You’ll need to provide some personal information and upload a valid photo ID to open an account.

After your account is set up, follow the instructions to apply for a MoneyLion Credit Builder Plus account. Good credit is not required to join.

Get approved for the online loan

When you get your loan through MoneyLion, you don’t have to sit around and wait for approval. Once you’ve opened your account with MoneyLion Credit Builder Plus, submit a request for a loan through the app.

You’ll get an instant approval for a credit builder loan for up to $1,000 at a low APR.

Can You Get a Loan with Bad Credit?

Absolutely! Though some lenders require you to share your credit score before you get a loan, becoming a MoneyLion Credit Builder Plus account holder doesn’t require a credit check.

If you have bad credit or you’re still working to build credit, MoneyLion could be a perfect fit for you. 

Build Your Credit with an Online Loan

Whether you want to pay down some credit card debt, cover an unexpected bill or simply raise your credit score, online loans provide a convenient and affordable solution over traditional banking choices. MoneyLion sets up automatic loan repayments that effortlessly align with your paydays, then reports those online payments to the credit bureaus to build your score.

Are you ready to get started with a low-interest online loan from MoneyLion? Download the app today and get started on the road to a better credit score — and more opportunities for you.


Current Credit Builder Plus membership required for Credit Builder Plus loan eligibility; the $19.99 monthly fee will be withdrawn from your linked bank account.  All Credit Builder Plus loans are made by either exempt or state-licensed subsidiaries of MoneyLion Inc. The Credit Builder Plus loan may, at lender’s discretion, require a portion of the loan proceeds to be deposited into a reserve account managed by ML Wealth, LLC and held by Drivewealth LLC, member SIPC and FINRA. The funds in this account will be placed into a money market cash management or FDIC bank sweep vehicle, and may generate interest at prevailing market rates.  You will not be able to access the portion of your loan proceeds held in the credit reserve account until you have paid off your loan, and so long as your Credit Builder Plus membership payments are current. If you default on your loan, your credit reserve account may be liquidated by the lender to partially or fully satisfy your outstanding indebtedness. May not be available in all states.Credit Reserve Accounts Are Not FDIC Insured • No Bank Guarantee • Investments May Lose Value. For important information and disclaimers relating to the MoneyLion Credit Reserve Account, see Investment Account FAQs and FORM ADV.

A Credit Builder Plus loan may or may not improve your credit score. Credit scores are the result of your personal credit practices.

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