How Online Loans Work and How to Borrow 

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Applying for a loan can feel like a time-consuming process. But with a number of lenders making it possible to apply for loans easily online, it may not be as inconvenient as you may think.

With Marcus by Goldman Sachs®, you could find your online loan options in as few as five minutes, and, if approved, you could receive your funds within five days.

Here’s what we’ll cover:

  1. What is an Online Loan?
  2. How do Online Loans compare to loans from a traditional brick-and-mortar lender?
  3. How an Online Loan application process could save you time
  4. Why consider an Online Loan?
  5. Online Personal Loans vs. Payday Loans
  6. What to consider when researching Online Loans
  7. What can you do with an Online Loan?
  8. How to apply for an Online Loan
  9. Marcus Online Loan benefits

What is an Online Loan?

Online loans are loans that you can apply for online instead of going into a bank — or anywhere, for that matter.

How do Online Loans compare to loans from a traditional brick-and-mortar lender?

Online loans generally work in a similar way to loans from traditional brick-and-mortar banks. There is an application, and online providers look into your credit score and other factors to determine your creditworthiness and ability to pay back the loan. If approved, you may get the payment in a lump sum. But there are some differences.

With an online loan, you apply for your loan online as opposed to shuttling paperwork between your home and bank branch.

How an Online Loan application process could save you time

In this day and age, online loans are an easy and fast way to apply for a loan.

Maybe you’re a parent who somehow attends all the soccer matches, ballet classes and rock-climbing meets while simultaneously working a full-time job, cooking all the meals, managing family finances and trying to sleep, so you don’t have time to make a trip to the bank. You may then be searching for an easy online loan application process that doesn’t require a trip to a bank.

Because you don’t need to go into a bank branch to fill out paperwork, applying for an online loan could be a huge time-saving option. There’s no waiting for a loan officer to review the application; online lenders can evaluate your application in minutes. With Marcus by Goldman Sachs, if you ever have questions, most calls are answered within 30 seconds. Our loan specialists can answer your questions and help you complete your application.

With a loan from Marcus, you can select the loan amount and desired monthly payment. We’ll give you your tailored loan options for a fixed-rate, no-fee loan.

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Explore your loan options, and pick the one that best suits your needs. Talk about easy.

Why consider an Online Loan?

In addition to the convenience factor, online loans offer some potential savings. Rates may be more favorable than those from traditional banks or credit unions, because online lenders don’t have to pay for the cost of supporting physical branches.

Most online personal loans are unsecured, meaning you don’t need to put up items you own, such as your car or home, as collateral to qualify for the loan. But, to be sure, it’s advisable to check the terms and rates carefully. Some online lenders include fees in addition to the interest rate. 

Online Personal Loans vs. Payday Loans

There are short-term online loans, known as payday loans, that charge extremely high interest rates — up to several hundred percent. These loans should be avoided because they entail high interest rates and can very quickly spiral out of control.

Marcus offers personal loans with rates as low as 6.99% APR — that's lower than most credit cards. Rates range from 6.99% to 19.99% APR, and loan terms range from 36 to 72 months. Only the most creditworthy applicants qualify for the lowest rates and longest loan terms. Rates will generally be higher for longer-term loans. Learn more

What to consider when researching Online Loans

In general, the features of the lender and the loan you’re considering should be the same as a typical brick-and-mortar bank may offer.

These considerations include:

  • The financial institution itself: How comfortable are you with them? Have they been around for a while? Will your loan be funded by a financial institution or will the money come from multiple sources that could include investors or businesses (as in peer-to-peer lending)?
  • The requirements: Can you apply for a loan even if you don’t have any other accounts with the bank or lender, like a savings account or a checking account?
  • The term, or the length of the loan: Do you have to repay the money in a short time, which may also be considered a short term?
  • The interest rate: Is the rate and the online loan monthly payment you’re being offered the right fit? Is the interest rate high or extremely high compared to what you’re being offered elsewhere?
  • The fees: Are there any fees and what kinds? Some lenders charge fees if you get ahead of your loan and pay it off early (this is called a prepayment fee or penalty).
  • Read more about the pros and cons of personal loans.

What can you do with an Online Loan? 

Online loans can be used in several ways. If you have unexpected expenses, want to consolidate debt or need to make some home repairs or improvements, online loans are an option. 

How to apply for an Online Loan 

Applying for an online loan is similar to getting a loan at a bank — it’s just more convenient. There are some immediate benefits, such as not needing to change out of your pajamas and leave your home. Be prepared to provide personal information such as your Social Security number and address. We also recommend checking the APR and fees associated with the online loan you are applying for.

Get started with Marcus

Explore your loan options, and pick the one that best suits your needs. Talk about easy.

Marcus Online Loan benefits

Marcus online loans offer many benefits that could help you in the long-term.

No fees. Ever.

No sign-up fees. No late fees — you just pay interest for the additional days. No prepayment fees. No fees, period.

Fixed rates for the life of your loan.

With a Marcus loan, what you see is what you get. While the interest rate on a credit card could change, a Marcus personal loan rate stays fixed.

Easy online loan application process.

Our quick and easy Marcus online loan application process may be an attractive alternative to other loan products for debt consolidation or balance transfers, especially if you don’t like going into the bank and you’re short on time.

With Marcus, you select an online loan amount and a desired online loan monthly payment, and we provide you with tailored loan options. Then, you choose the option that best fits your budget and your schedule, all from the comfort of your home or local coffee shop.

Loans amounts up to $40,000.

Qualified borrowers can get a loan of up to $40,000, with loan options tailored to fit their needs. Marcus loans range from $3,500 to $40,000. Marcus may be able to help you meet your goal, whether it’s a new home improvement project or a move across the country.

Apply for an online loan today

Forget driving to the bank. Apply from the comfort of your home. See how much you can save with a fixed-rate online loan from Marcus.

This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.