How to Use Online Loan Sites

2. Review terms and conditions very carefully. Even if the interest rate is low, there may be other fees attached to a loan or simply for signing up on a Web site that are not prominently advertised. Check out the policies on missed or late payments -- if the interest rate surges from 8% to 80% as a result, or if steep fees are attached, it might be best to avoid the debt. Also note what steps are in place in case the site goes under: Are debt obligations kept the same, and who will then service the loan?

3. Those with good credit histories may get better opportunities online, even if they get approved in the bank. For instance, FirstAgain.com lends only to those who have five or more years of "significant," blemish-free credit history with various types of debt -- credit cards, vehicle loans, mortgages and so forth. The site's median customer is 40 years old, earns a salary of $110,000 per year, has proven job stability and has a credit score in the mid- to upper-700s and an 82% chance of being a homeowner.

As a result, FirstAgain, whose capital comes through a warehousing agreement with Merrill Lynch(MER Quote), is able to offer four-year auto loans at a rate of 6.15%, vs. a national average of 6.58% (according to BankingMyWay.com). Spokesman Peter Meade says most of the rates are "very competitive."

4. Check out the history of the site and where capital comes from if it's not a peer-to-peer lender. While you might not want to rule out smaller start-ups completely, sticking with names you recognize and trust can provide peace of mind when giving personal information to a nameless, faceless entity. Scope out the Web site to see whether there is an address and phone number to reach out to customer service with questions or concerns in case a problem arises.

5. Review your other options if rates or fees are too high. If you've been turned down by the bank and your credit score is too low to get a competitive rate online, ask yourself whether you can do without the loan or seek out friends or family members with some extra cash in their pockets who might offer a better deal.

Even that type of loan has an online destination: Virgin Money services loans between friends and family members with documentation, a repayment schedule, reminders and online banking transfers. However, its servicing fees start at $99 a year, with additional $9 fees per payment.