Month: January 2020

How to Quickly Drop Holiday Debt

Posted on by Sean Pyles

If you woke up on Jan. 1 groggy with a holiday debt hangover, you weren’t alone: 3 in 5 shoppers took on some form of debt in the previous holiday season, NerdWallet’s latest holiday shopping report found.

Much like a champagne-fueled headache, this debt can persist long after holiday merriment fades. Of those who took on holiday debt in 2018, 35% were still paying it off when surveyed in mid-September 2019, the report found. In fact, only 24% of those who incurred debt during the holidays paid it off in the first billing period.

You can beat the odds, though, and work to quickly cleanse your finances of last year’s decisions. Here’s how to figure out when you’ll be free of holiday debt and speed your payoff timeline.

Assess your debt

Before you can find your debt-free date, you’ll have to take stock of your balances. It might be a little painful, but this step sets you up for success.

“First and foremost, take an inventory of your debt,” says Michelle Goeppner, director of credit product strategy at Alliant Credit Union, a nationwide financial cooperative based in Chicago. “People may forget about a store card they took out during the holidays. What are the balances, rates you’re paying and to whom? List all those out.”

Start by pulling out all your credit cards, logging into your accounts online and assembling a list or spreadsheet with the details. Make sure you know each account’s balance and interest rate, as well as your total debt load.

Know what you can pay

With your credit card accounts sorted, turn to your budget.

“Think about what you’re capable of paying toward your debt,” says Lauren Anastasio, a Pennsylvania certified financial planner with SoFi, an online financial services company. “Evaluating your monthly cash flow is really where that starts.”

One guideline is the 50/30/20 budget, where half your income covers needs like housing, 30% goes to wants, and 20% goes to debt payments and savings. Depending on your income and your debt payoff goal, you may need to temporarily trim your “wants” money to funnel more cash to paying off debt.

Find your debt-free date

Next, make a plan to winnow down holiday debt — and figure out when you’ll be debt-free.

A debt payoff calculator can do the work for you. Punch in the details of your debts and what you can pay monthly, then toggle between different payoff methods to see what might work for you and how much you might be able to save in interest or time.

The “debt snowball” and “debt avalanche” are two common payoff strategies. With the debt snowball, you focus all your extra payoff money on the smallest debts first, with the idea that getting small wins can keep you encouraged. But the debt avalanche, where you focus on highest-interest debts first, may save you time and money on interest.

Whichever method you choose, pay as much above your minimums as you can.

“If you’re only paying the minimum, you’re going to really be paying it forever,” says Tania Brown, a certified financial planner in Atlanta with SaverLife, a nonprofit that helps people build savings. “Sometimes people are really surprised by how much difference $50 can really make.”

On average, shoppers anticipated they would charge on credit cards $660 in gifts in the 2019 holiday season, according to the shopping report. If they wiped that out within four months, they would pay just $22 in interest assuming an interest rate of roughly 17%. But if they paid only the minimum on that amount, paying it off would take nearly four years — and they would incur roughly $240 in interest charges.

Boost your payoff dollars

If, after using a debt payoff calculator, you find that you’ll be paying holiday debt for months to come, use a strategy or two to boost your payoff:

  • Increase your income: You can pump some additional cash into your budget, for instance by selling things you no longer use or picking up a temporary side gig.
  • Use your tax refund: File your taxes early if you anticipate a refund and dedicate that money to wiping out debt.
  • Look into consolidation: Collapsing multiple debts into one, with a personal loan or a balance transfer credit card, means fewer bills to track and can make debt less expensive by lowering your interest rate. Compare options, but know that you’ll typically have to have good or excellent credit to qualify.

Sean Pyles is a writer at NerdWallet. Email: spyles@nerdwallet.com. Twitter: @SeanPyles.

The article How to Quickly Drop Holiday Debt originally appeared on NerdWallet.

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This Is the Year You Stop Wasting Food (and Money)

Posted on by Laura McMullen

Who hasn’t felt the shame of a refrigerator purge? You’re sentenced to face the forgotten leftovers, fuzzy produce and years-old salad dressing that you swear must have come with the fridge. But it didn’t. You paid money for all these things, and now you have to throw them away.

Take heart. You’re far from the only person to waste food and money. And unlike more ambitious money fixes, reducing food waste is relatively simple and sure to pay off. In fact, a person could save about $370 annually on average by wasting less food, according to the United States Department of Agriculture. And a family of four could pocket an extra $1,500 or so on average in the new year.

As if saving money doesn’t feel good enough, reducing food waste also helps the planet. Most food we pitch winds up in landfills, which emit harmful methane gas. Less waste, less gas.

Reducing wasted food also conserves energy and resources, according to the Environmental Protection Agency.

So make this the year you don’t have to come eye-to-potato-eye with another decaying legume. Here’s how to waste less food:

Start with a fridge cleanout

Get a “reality check” on what’s going to waste in your fridge, says Cassie Bartholomew, program manager at StopWaste, a public agency reducing waste in Alameda County, California. Remove and evaluate all items that are spoiled or inedible. Rather than feel bad about the waste, try to learn from it. “Ask yourself, ‘Why am I tossing this food?’” she says. “Look at those root causes.”

Did you buy an ingredient you never used? More planning before shopping could help. Did you forget about leftovers or produce that’s gone bad? StopWaste’s 10-Minute Fridge Reality Check recommends designating part of the fridge to food that’s quick to spoil. Label that section with an “Eat This First” sign.

During your cleanout, you may realize some foods on death row still have some life in them. Foods past their “sell-by” or “use-by” dates may still be safe, and wilted produce could still be cooked. (More on that later.)

While you’re in the fridge, Bartholomew recommends checking its temperature. A temperature of 40 degrees Fahrenheit or below will keep foods safe, according to the Food and Drug Administration, which recommends using a freestanding appliance thermometer. (You can find these in many stores and online for under $10.) Freezers should be at 0 degrees.

Plan before shopping

Keeping tabs on your fridge and pantry or cupboards will help you buy less stuff that could go to waste. Before shopping, Bartholomew recommends identifying which foods you already have and what meals you can make with them. (Potatoes and butter? Mashed potatoes it is — no need to buy those ingredients.) Then identify what you need to complete the dish. (Low on milk — add it to the shopping list.) Otherwise, it’s too easy to overspend on groceries by purchasing foods you may not need.

Store foods to last

You bought the right groceries, now make sure they stay fresh. Google “how to store produce,” and you’ll learn that some foods should be refrigerated (kiwis, cucumbers), while others shouldn’t (bananas, avocados). And some fruits, like apples, release a gas that ripens other produce faster.

Store leftovers and cooked foods so they stay safe and can be identified later. Bartholomew recommends clear, airtight containers with labels that state the food and when it was prepared or stored. That’s especially important for foods in the freezer, since you’ll likely toss ice-crusted artifacts with no origin story.

Use soon-to-be spoiled foods

Check your fridge and freezer for foods on the brink of going bad, says Lindsay-Jean Hard, author of “Cooking with Scraps: Turn Your Peels, Cores, Rinds, and Stems into Delicious Meals.” Of course, she says, moldy or spoiled food is off-limits. (StillTasty.com provides guidance on shelf life and signs of unsafe foods.)

But wilted vegetables are usually fine for cooking or throwing into a soup. Or roast them now, and freeze them for later, she says.

For those last few slices of bread that are too stale to be appetizing, Hard suggests making them into bread crumbs or croutons. “Then you can add a lot of texture to different types of dishes, like salads or pasta,” she says.

And just like that, you’ve removed bread from your next pantry purge.

This article was written by NerdWallet and was originally published by The Associated Press.

Laura McMullen is a writer at NerdWallet. Email: lmcmullen@nerdwallet.com. Twitter: @lauraemcmullen.

The article This Is the Year You Stop Wasting Food (and Money) originally appeared on NerdWallet.

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4 Things to Know if You’ve Never Budgeted Before

Posted on by Courtney Jespersen

We’ve entered a new year and a new decade. Not surprisingly, this fresh start has probably brought new goals to mind — like money management.

If you’re planning to start balancing your income and spending, here are four things to keep in mind before you dive headfirst into budgeting in 2020.

1. Budgets aren’t just a New Year’s resolution

If budgeting is one of your New Year’s resolutions, maybe it’s time to think about it differently.

“My personal opinion is forget New Year’s resolutions,” says David G. Metzger, certified financial planner and the founder of Onyx Wealth Management in Chicago. “They never work.”

Budgeting is more than just a January whim, so don’t view it as such. Before you begin, be honest with yourself about if you’re ready to make changes that extend into the foreseeable future.

2. You’ll need a support system

Know that you don’t have to do it alone. Tools like budget apps can help track your spending, while people in your life can hold you accountable along the way.

“An accountability partner or budget buddy can really be helpful when your motivation is waning about the end of February,” says Colleen Weber, a CPA and certified financial planner in Chanhassen, Minnesota.

If you’re part of a couple, devote 20 minutes each week to talking about money together, she says. Look back at your recent money decisions, anticipate major expenses coming up and get on the same page about strategies to reduce spending in the week ahead.

Even if you’re not part of a couple, potential encouragement is everywhere.

“If you have a picture of a vacation place that you want to go to, post it on your refrigerator or somewhere where you would see that regularly,” Weber says. “You can say, ‘This is why I packed my lunch today. I’ll be in the Bahamas this time next year.’”

3. Fun won’t be a distant memory

When you commit to budgeting, you don’t have to kiss movies, concerts, vacations and fancy dinners goodbye. In fact, it’s crucial for you to leave room for discretionary spending.

“A budget where there is no room to have fun — you’re wasting your time,” Metzger says. “Nobody wants to live that way. Nobody’s going to live that way.”

Ideally, according to the 50/30/20 budget, 50% of your budget should be allocated for needs, 30% for wants and 20% for savings and debt repayment.

When you do have to cut back, it helps to change your thinking. Budgeting doesn’t always have to be confining, especially if you’re accomplishing goals like saving for a house or paying down debt.

“Think of it in terms of a predetermined spending plan and not a budget restriction plan,” Weber says.

4. Don’t expect perfection

Remember, you’re not perfect — and your budget doesn’t have to be perfect. Be patient with yourself, especially if you’re taking steps in the right direction.

“Cut yourself some slack,” Metzger says.

That being said, check in on your progress regularly to review your spending and ensure you’re following through with the budgeting goals you’ve implemented.

“If you’re making positive changes and you’re making these positive incremental steps, take stock of them,” Metzger says.

Courtney Jespersen is a writer at NerdWallet. Email: courtney@nerdwallet.com. Twitter: @CourtneyNerd.

The article 4 Things to Know if You’ve Never Budgeted Before originally appeared on NerdWallet.

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Smart Ways to Establish Credit in 2020

Posted on by Amrita Jayakumar

Dipping your toe into the world of credit? You’re in luck: There are more ways to establish credit now than there were in decades past.

You build your credit score by adding positive information to your credit reports, which are files of financial data about you. These files are compiled by the three major credit bureaus, Experian, Equifax and TransUnion. Lenders, landlords and employers may check one or more of those files while reviewing your application.

Here are three well-known ways to establish credit, plus some new products designed to give you a leg up.

Traditional credit-building tools

These three approaches can quickly build your credit.

Authorized user

Ask someone with good credit habits to add you as a user on their credit card. They don’t have to let you use the card; just being added to the account is enough.

Pro: You can benefit from their credit history.

Con: Not all card issuers report authorized user activity to the bureaus, so check that first.

Secured credit card

These cards are relatively easy to qualify for because they require an upfront deposit.

Pro: Payments are usually reported to all bureaus.

Con: Your credit limit is typically small.

Credit-builder loan

These help you improve your credit and save at the same time.

Pro: Payments are usually reported to all bureaus.

Con: You cannot access funds until you’ve paid back the loan.

New tools that can help

Qualifying for credit when you are new to credit is tough. These new tools try to recognize or reward you for paying bills that don’t normally factor into your score.

Rent reporting

Paying rent is traditionally not counted toward your credit score. But many companies, including Rent Reporters, RentTrack, Rock the Score, and CreditMyRent, will let you or your landlord report your rent payments to the bureaus.

Pro: You can opt in or out of having rent reported.

Cons:

  • Not all credit score models incorporate the data. The widely used FICO 8 scoring formula doesn’t consider rent. But VantageScore, FICO’s competitor, does.
  • Reporting companies charge a monthly fee of $6.95 to $9.95 and a one-time enrollment fee of $25 to $95.
  • Some companies report payments to only one or two credit bureaus. You want payments reported to all three.

Experian Boost

This free service lets you add on-time cell phone and utility payments to your Experian credit report. This information, which is not typically counted toward your score, is used to calculate your FICO score and can push it up higher.

Pros: 

  • You don’t need to qualify for Boost. As long as you pay utility and cell phone bills through your bank account, that information can be added to your Experian report.
  • Only on-time payments are added. This is different from how credit usually works, where both on-time and late payments go on credit reports.

Cons:

  • Payments show up only in your Experian credit report, not the other two.
  • You have to let Experian’s data partner scan your bank account transactions.
  • Lenders unfamiliar with this new product may interpret your utility and cell phone information as part of your debt load, which affects your chances of qualifying for credit. Experian is “working with lenders to ensure they understand these positive payments,” spokeswoman Amanda Garofalo says.

UltraFICO

This new score is not yet widely available, but FICO says it will roll out this spring. Unlike the traditional FICO score, UltraFICO takes into account how much you have in savings, how long your bank accounts have been open and how active they are.

If you cannot qualify for a credit product with your score, you can ask lenders to pull your UltraFICO and give you a second shot.

Pros: 

  • Free.
  • Rewards responsible spending and saving.

Cons: 

  • You have to let FICO’s data partner scan your bank account transactions.
  • You cannot see your UltraFICO score unless you’ve been rejected.

Experian Lift

Experian is also working on a new credit score, meant for lenders, that uses nontraditional data to paint a finer picture of your finances. The data includes on-time rent payments, payday loans, prepaid cards, check cashers and public records such as evictions and professional licenses, Experian says. It also looks at whether you pay your bills in full or minimums.

“Lenders can use the new score as their primary score, as a second-chance score (for loan application declines) … or as an overlay to an existing score to create a more complete picture of a person’s creditworthiness,” says Alpa Lally, vice president of Experian Data Business.

Experian Lift will roll out to lenders early this year, she says.

Pro: 

  • Considers data from financial institutions that don’t usually report to the major credit bureaus.

Cons: 

  • You cannot see your Lift score unless you’ve been rejected.
  • You cannot opt in or out of sharing your data.

Amrita Jayakumar is a writer at NerdWallet. Email: ajayakumar@nerdwallet.com. Twitter: @ajbombay.

The article Smart Ways to Establish Credit in 2020 originally appeared on NerdWallet.

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Overshopped in December? Try These 3 Strategies to Recover

Posted on by Courtney Jespersen

Christmas, Hanukkah and the holiday season have come and gone — likely taking quite a bit of your cash with them.

You can’t magically make more money appear in your bank account. And it’s definitely too late to ask Santa for a check. But here are three of the next best things you can do.

1. Adjust

It’s not surprising if you spent more than you can afford over the past couple of months. After all, we often do this to make loved ones happy, says Richard K. Colarossi, a certified financial planner and partner at Colarossi & Williams in Islandia, New York.

But now it’s time to get back on budget. Cut back your regular spending in an attempt to save more money to free up funds for debt repayment and savings.

Colarossi estimates that bringing your lunch to work for the next few weeks and skipping a $5 cup of coffee could save at least $100 in a month.

There are other things you can do, too. Consider minimal changes such as setting your thermostat a degree or two lower and cutting down on an online shopping habit.

For more substantial savings, bundle your cable and internet, cut out rideshare services, cancel some music and streaming subscriptions or renegotiate the price of your utility bills.

Pay down high-interest debt as soon as possible, Colarossi advises. And, if you’re able, make it a point to fund your savings plan as much as you can, even if it’s a small amount.

2. Avoid

You can also control spending by managing commitments over the next 12 months. If you’re already struggling after paying for gifts, try not to overload yourself with more financial obligations.

“Plan ahead for abstention,” said Kelly Goldsmith, an associate professor of marketing at Vanderbilt University, in an email. “Don’t book a vacation, or commit to attending a wedding that you know will be accompanied by a hefty price tag.”

Allow some time to get your bearings before you take on new, out-of-the-ordinary expenses.

3. Encourage

Give yourself positive reinforcement along the way. The first month might be the hardest, but it will get better. Goldsmith says cutting spending now will boost your confidence and make it easier to save in February, March and beyond.

“Compare your credit card bills from November, December and January and blow your own mind with how much less you spent,” she said.

As you keep saving, you’ll figure out which techniques work (or don’t work) for your lifestyle. Perhaps you’ll want to keep coffee in your budget after all, but discover that you can do without monthly beauty box deliveries.

Then, look ahead so you can put yourself in a more desirable financial position later this year. Colarossi points out that, ideally, sticking with a budget should produce a surplus that can be used for holiday spending.

Depending on what happened this time around, you may need to budget more money for the next holiday season — or budget the same amount and spend less.

Courtney Jespersen is a writer at NerdWallet. Email: courtney@nerdwallet.com. Twitter: @CourtneyNerd.

The article Overshopped in December? Try These 3 Strategies to Recover originally appeared on NerdWallet.

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5 Ways to Get Credit-Healthy in the New Year

Posted on by Bev O'Shea

There’s nothing like the clean slate of a new year to inspire us to do better. Unfortunately,  knowing what to do doesn’t necessarily translate into getting it done.

If you’re looking to build or rebuild credit, there’s no better time than now. Here are some habits to develop — and some tips on how to make them stick.

1. Pay on time

Even one missed payment can tank your credit because payment history is the biggest factor in your score. Worse, a late payment can stay on your credit report for up to seven years. So getting payments in on time is more important to your credit than any other single thing you can do.

Signing up for automatic payments can work well for monthly bills with a set amount, like a car payment. Automatic payments for bills with varying balances, like credit cards, could lead to overdrawing. On those, you could opt to autopay the minimum to ensure the account is never late and make a separate payment to keep your balance down. You can also set up email or text reminders about approaching due dates.

If a late payment is unavoidable, Terry Griffin, a senior vice president at credit bureau Equifax, recommends contacting the creditor to try to negotiate a lower minimum or interest rate temporarily.

2. Keep an eye on balances

Ideally, your credit card balances should stay well under 30% of your credit limits. Credit utilization — the percent of your credit limit you use — is the second-biggest factor in your score.

Many cards let you set alerts to let you know when your balance nears a percentage of your limit or a dollar amount you choose.

Of course, it’s best to pay the full balance every month. In reality, your refrigerator may fail the same month that your car needs a new transmission. You might need to carry a larger-than-normal balance for a while.

Whittling down balances will help your credit quickly. As soon as lower balances get reported to the credit bureaus, your score won’t penalize you for the past.

3. Save for a rainy day

Information about your savings isn’t in your credit report, so it does not directly affect your credit score. But having an emergency fund can protect your score by letting you keep up with bills after a job loss or avoid a high balance when you have unexpected expenses, for instance, Griffin says.

Arrange to have a set amount of every paycheck sent to a savings account. Even a few hundred dollars can help keep unexpected bills from becoming financial disasters.

4. Monitor your credit reports and scores

You’re entitled to at least one free credit report every 12 months from each of the three major credit-reporting bureaus. It’s smart to check those annual reports and dispute any errors you find.

But you should monitor your credit more frequently: A big change in your score could suggest identity theft. Sign up for a free online credit score and report that updates regularly. Many banks, credit card issuers and personal finance websites offer them.

If you don’t plan to apply for credit in the near future, freeze your credit. You can still check your credit score and use your credit cards, but a frozen credit file makes it difficult or impossible for a fraudster to open new accounts in your name.

5. Think twice before applying for new credit

Applications can shave a few points off your score because the lender or card issuer does a “hard inquiry” to check your credit. If you’re approved, the new account reduces your average age of credit, which also can hurt your score.

Set alerts to help these habits stick

“Atomic Habits” author James Clear recommends making it as easy and attractive as possible to establish and maintain new habits. Your credit accounts almost certainly have options to help you stay on top of due dates and credit utilization.

Setting up alerts will only have to be done once. You can schedule an hour or so — put it in your brand new calendar planner or bullet journal — to set up alerts and payments, and to sign up for free credit reports and scores that update regularly.

Perhaps you check and act on those alerts after Sunday brunch, pairing bill-paying with an activity you enjoy. Another tip is to use a tracker, like a journal or calendar, which can serve as a prompt and also gives you the joy of checking something off your list.

Bev O’Shea is a writer at NerdWallet. Email: boshea@nerdwallet.com. Twitter: @BeverlyOShea.

The article 5 Ways to Get Credit-Healthy in the New Year originally appeared on NerdWallet.

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How to Make Room for Fun in Your 2020 Budget

Posted on by Courtney Jespersen

Reporting for jury duty. Standing in line at the DMV. Going to the dentist. Making a budget.

What do all of these have in common? They’re activities you’d probably like to skip.

And while budgeting certainly isn’t exciting, breaking down your spending can give you the ability to do things you enjoy.

Here’s how to leave room for more than just bills in 2020. (These simple tips spell F-U-N.)

Find your 50/30/20 balance

There are countless budgeting techniques out there, but one is particularly effective and easy to remember.

It’s called the 50/30/20 budget. This plan accounts for typical general expenses like your mortgage, rent, car payment and utility bills, as well as individualized discretionary spending such as travel, streaming services and more.

Here’s the gist: Start with your take-home pay. Commit no more than 50% of that figure to needs and fixed expenses, like your mortgage. Use 20% for savings and debt repayment. The remaining 30% can be spent on wants and variable expenses. A 50/30/20 budget calculator will do the monthly math for you.

Katie Brewer, certified financial planner at Your Richest Life, likes the flexibility of this method.

“It’s a lot less restrictive than $200 in this category, $300 in this and $127.50 in this one,” Brewer says.

It’s also freeing to know that this method allows you to spend money on things that are important to you, your family and your lifestyle.

“I really like for people to go through and tell me the top two things they really like to spend money on,” Brewer says. “Sometimes with a couple, those might be slightly different. We try to always have those be a priority in their spending plan.”

Your current spending percentages probably aren’t at exactly 50%, 30% and 20%. You’ll want to slowly modify until you get close to these levels.

Understand your money flow

Once you have an idea of your recommended spending, start tracking.

“Have your bills account and your spending account,” Brewer says. “There’s no cheating that. Whatever is in there is in there.”

Divide your money appropriately between them when it first hits your bank account, she suggests.

Robert Lopez, CFP and founder of financial planning company FP Guidance, advocates a similar strategy. While some people may prefer to keep everything in one place, he says separate accounts can be helpful — especially if you name them. You can even create different accounts for different financial goals you have at the same time.

For example, if you call one account your “honeymoon fund,” you may be less inclined to pull money from it than if it were just an undesignated savings account.

But don’t stop there. Implement more methods to ensure you’re not spending your mortgage money on subscription boxes.

Lopez recommends getting a different-looking card for each one of your accounts, if your bank offers that option. So, for instance, your grocery shopping card might be red, but your entertainment card would be blue. Depending on which card you use, you’ll be pulling money from the appropriate category.

Then, you can check your bank’s app to see where you stand.

Never stop trying

Remember that having a wants category in your budget isn’t an excuse to spend money on vacations or shopping sprees just because. Rather, Lopez says, it’s like a cheat day — a way to keep yourself motivated to follow the rest of your budgeting habits.

“If your whole budget is just things that you need and then paying down debt or investing … you’re never going to have any fun, and you’re not going to stick to it,” he says. “You’re going to break that budget.”

Your budget will be a work in progress, and that’s OK. Your spending in some months may be higher than during others. You’ll probably spend more on gifts in December than in March, for example.

Brewer recommends starting to pay for your variable expenses with a debit card so you can be proactive (rather than reactive) about your spending. Once you get the hang of it, you can switch back to using a credit card. Lopez says cash can be helpful, too. If you bring only $50 to a concert, for instance, that’s all you’ll be able to spend on merchandise and refreshments.

Find the method that works for you. As he puts it, a budget is something to grow with.

“If someone can build a perfect budget in January, they are in the wrong profession.”

This article was written by NerdWallet and was originally published by The Associated Press. 

Courtney Jespersen is a writer at NerdWallet. Email: courtney@nerdwallet.com. Twitter: @CourtneyNerd.

The article How to Make Room for Fun in Your 2020 Budget originally appeared on NerdWallet.

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Online or In Person: What’s the Better Way to Get a Loan?

Posted on by Annie Millerbernd

If you’re looking for a personal loan, your options are increasing. There’s the traditional route — visit a loan officer at your bank — or the more modern option of an online lender that can get you a loan virtually overnight, if you qualify.

Financial technology companies that offer personal loans online are encroaching on banks in the lending business. Fintechs originated almost half (49.4%) of unsecured loans in March 2019, up from 22.4% in March 2015, according to a recent study by credit bureau Experian.

While some large national banks don’t offer personal loans, others are responding to the competition with online offerings of their own. PNC Bank, one of the largest banks in the U.S., launched online personal loans this year to capture customers it couldn’t serve at brick-and-mortar locations, says senior vice president for personal lending Chris Dervan.

“Like many industries, there’s been a big trend toward digital, and that trend will continue,” he says. “But part of what we’re seeing is that there’s still a substantial customer base who likes that personal touch.”

The heightened competition means consumers can handpick where they get a personal loan, be it online or at a bank branch. Here are four questions to ask when choosing between a bank loan and an online loan.

1. Would you pay for personalized loan service?

One of the obvious differences between bank and online lenders is the face-to-face exchange you can have at a physical bank.

If you value personal interaction and the security of knowing who is handling your loan, a bank might be for you, says Eric Simonson, a Minneapolis-based certified financial planner and owner of Abundo Wealth.

“Some people like to just know that there’s a … person that makes sure the loan goes through smoothly for them,” he says.

Also, you may have the opportunity to negotiate a lower rate or qualify with a lower credit score if you’re talking to a person you already have a relationship with at a bank, Simonson says.

But the personal touch might come at a premium, says Oklahoma-based CFP Kyle Jackson. He says brick-and-mortar banks tend to pass on to the consumer operational costs that online lenders don’t have, which can result in higher rates or fees.

2. How fast do you need the money?

If you need a loan quickly, online might be the way to go.

Online lenders — and traditional banks with an online option — can sometimes process an application and make a decision more quickly than banks that don’t have an internet presence, Jackson says.

Some of those lenders can fund the loan the same day you apply, or the following business day.

Lenders with an online presence can also expedite your research process if they post their rates, says Todd Nelson, senior vice president with LightStream, the online lending arm of SunTrust Bank.

“If you’ve got good credit, you don’t really worry whether you’re going to get approved,” he says. “What you’re more concerned with is ‘Am I going to waste my time with applying for a loan and getting back an offer I don’t want?’”

3. Are you comfortable applying for and managing a loan online?

For an online loan application, you’ll need to electronically share information like your Social Security number, education history and bank account information, which might require granting the lender access.

Especially in those cases, beware of scammers. Wisconsin-based CFP Ben Smith with Cove Financial Planning says that if you don’t feel confident that you can tell whether an online lender is legitimate, the safest option would be a physical bank.

Managing a loan online, which typically means your only contact with the lender is via a customer service representative, can prove challenging for folks who aren’t financially or technologically savvy, Jackson says. If this is you, the online-only experience may not be a good fit.

4. Where can you get the best loan?

The chief considerations when shopping for a loan should be its rate, fees and terms, Nelson says, rather than whether it’s from an online lender or a bank branch.

Some online lenders let you pre-qualify and see your potential rate, which is helpful information to have as you shop around.

Simonson notes that if you have less-than-desirable credit or are seeking a loan for a nontraditional reason, a community bank or credit union might be more willing to take on the risk of lending to you than a big bank or online lender would be.

Annie Millerbernd is a writer at NerdWallet. Email: amillerbernd@nerdwallet.com.

The article Online or In Person: What’s the Better Way to Get a Loan? originally appeared on NerdWallet.

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