Storefront Lenders vs Online Lenders: Pros And Cons

Lenders are well-known for offering the option of getting payday loans. However, the business has now split between storefront lenders and online lenders. The main difference, of course, is the presence of a brick-and-mortar store. However, many other things can help you decide between going to a storefront lender or using the online services that are now offered. What are these differences, and how can you determine what is best for you?

Storefront Lenders

Storefront lenders have been around for decades, and they are the most well-known way of getting a payday loan. These loans are made with the condition that you will pay them back on the day you receive your next paycheck or before then. Some of the things many people prefer about storefront lenders are:

Face-to-face interaction:

Despite the power and reach of the internet, and the subsequent growth of online businesses, people continue to value in-person interactions.

This is especially true when it comes to financial matters. There are a few things that people take more seriously than their money. Therefore, they want to make sure there can be a minimum of trust between them and the lender.


Any physical loan business should provide the money on the same day the loan is requested. This means that you can have the money you need immediately, without any further delay.

Doubts resolution:

You may have numerous questions before borrowing money. In the majority of cases, the fastest way to get them resolved is with the person that is processing your application. This is a direct way to get the answers you need immediately.

However, not everything is perfect when it comes to storefront lenders. Some of the negative aspects of getting payday loans with direct lenders instead of online are:


Not everyone has access to a quick and easy transportation system. While people living in big cities might have affordable public transportation options, this is not always the case. Furthermore, if you’re not in a big city, and you don’t have a car, things can turn very difficult quickly.

Lack of convenience:

If you don’t need the money in cash but directly into your bank account, then you might need to make an extra trip. This is because after you get your cash, you will have to go to the bank and deposit it. This is an investment of time and money that might not be at all convenient for you.

Post-dated checks:

More often than not, storefront lender companies request that a check is left as a guarantee. This means that you need to write a check, which will be dated for two weeks after the loan or four weeks after it, depending on what was agreed upon.

Most people don’t even have a checkbook these days! If this is your case, you would have to go to your bank first to buy a check so that you can get your loan.

 Payment method:

Just like you need to go in person to get the loan, usually, you have to go and make the payment of the loan –or the fees- in person. This can be very inconvenient, especially for people with reduced mobility or very busy work schedules.

Online Lenders:

Just as the name implies, online lenders conduct their business entirely online. This can have many benefits, but it also has some downsides that can’t be ignored. Some of the main benefits are:

  1. Easy Access: It has been estimated that approximately 3.5 billion people own a smartphone. This means that it’s very likely that you have access to one. Therefore, it can be very easy for you to look up online loans. With dozens of websites out there, you get to pick which one you like the most, and you can apply to get the money you urgently need.
  2. You’ll likely find out about online loans on the web. After all, these online businesses avidly use digital marketing to make their presence known, so they might even appear on your social media feed.
  3. Money into your bank: If you need the money you are borrowing to be in your bank, then this is a good way to go. With online loans, the money is wired into your bank account, making it easy for you to manage it as you see fit.
  4. Easy to pay: These online businesses offer you the option of paying the same way in which you got the money, online! Therefore, you don’t need to go anywhere to pay back the money you borrowed. You can just send it to them online and free yourself from this debt.

Just like with storefront lenders loans, there are negative aspects when it comes to getting a payday loan online. Here are some of the main problems you might face:

  1. Waiting time: Unlike a brick-and-mortar loan business, online lenders often require a day to process your request. This is because they have to check your identity and the information you sent online.

This can be extremely inconvenient, especially if you’re getting the money due to any type of emergency. This is the main downside of getting your loan online.

  1. Difficult doubt resolution: This is going to depend on the website you’re on. The majority of them offer good customer service, meaning you can directly contact them if you have any questions. Others have a Frequently Asked Questions (FAQ) section, where you can dispel your doubts.

You might find time-consuming the fact that you have to call someone to get your questions answered or wait for an answer to your email. This is a big difference when it comes to physical stores, where you have direct access to the worker that can help you with your questions.

  1. Trustworthiness: It’s far easier to notice if something seems out of place at a physical lender than during an online process. Therefore, it’s extremely important to take the necessary precautions. A good way to assuage your doubts is by looking for reviews outside the actual website. This means getting third-party reviews.

This could be seen as a benefit, as it’s far easier to find reviews about online businesses that asking someone about a brick-and-mortar lender. This way, you can be sure and feel confident about the step you are about to take.

Whichever option works best for you, there are certain universal things you should keep in mind when it comes to lender businesses. Both online and storefront lenders have limits as to how much they can loan you. The average limit in the United States is $500.

Something else to consider is the cap in place regarding how much they can charge you as a fee. Most states place this cap between $10 and $30 for every $100 you’re borrowing. You can check the caps determined by your state if you feel someone is charging you too much.


Lastly, always do your research before going with any of these two options. Be it references from someone you trust or reviews from third-party websites, this is one of the best ways you can make sure that the option you chose is the right one for your needs.