How Long Does It Take To Get a Personal Loan?

Personal loans can be used for almost anything, making them a popular option for those who need extra cash fast. But just how quickly can you actually get a personal loan?

Usually, personal loan applications are approved or denied within a few business days, with the funds being released shortly after. Some lenders even offer the potential for same-day approval and funding. We’ll review the most important factors impacting this timeline and what you can do to speed things along.

What Factors Impact How Long Loan Approval Takes?

There’s an old adage in business: Underpromise and overdeliver. This applies to personal loan timelines because most lenders will err on the safe side with official timeline estimates. You’ll often see language from lenders estimating the process to take a week or more. That isn’t usually the case, but lenders prefer to be cautious when setting expectations.

Below are the factors to be aware of that will affect that timeline the most.

Lender

In addition to impacting the annual percentage rate (APR) and minimum credit score requirements for securing your loan, the type of lender you choose may also affect the loan timeline.

Online lenders tend to be faster than banks or credit unions when processing and issuing personal loans. Some online lenders also offer the potential for same-day funding if you apply early enough in the day and everything gets approved.

If you apply through a bank or a credit union, it’s unlikely that you’ll receive the funds on the same day. It’s common to see language estimating the process could take a week or longer, but it could be faster. Three to five business days is usually a good ballpark estimate.

Strength of the application

There are always exceptions, but generally speaking, the stronger your application, the faster your approval timeline. Many lenders incorporate automated underwriting into their review process. The process can move extremely quickly if your application is strong and passes through with no flags.

Your credit score and debt-to-income (DTI) ratio will be two of the most important factors in determining the strength or weakness of your application. Most lenders have minimum thresholds you’ll need to hit in order to be approved, but they don’t always publicize them.

Weaker applications can be more likely to require additional scrutiny. This can trigger steps like a human underwriter needing to take a deeper look into your application, which can slow down the entire process.

Supporting documentation

Your lender cannot move faster than you. If you don’t fill out the loan application in its entirety or if they ask for supporting documentation and it takes you a week to provide it, the process will inevitably be slower.

Depending on your circumstances, your application might naturally need more supporting documentation that complicates the process. For example, if you’re self-employed, you can still get a personal loan, you’ll just need to prove your income is stable.

Tips To Speed Up How Long It Takes To Get a Personal Loan

Once you’ve submitted your application, the application review and ensuing timeline are almost entirely outside of your control. That said, there are certain things you can do ahead of time to streamline the process.

• Check your credit report: It’s important to know your credit score so that you have an idea of what loans you can qualify for. It’s also important to ensure there are no errors on your credit report. If there are, now is the time to dispute them and get your report corrected before you actually apply for a loan.
• Gather supporting documentation: You may be required to prove your identification, where you live, income, debts and more via documentation. Preparing all of that ahead of time will make sure you have it for the application and that you can quickly provide it to your lender if they request any additional materials.
• Choose an online lender: In addition to saving you physical travel time, online lenders tend to have the necessary infrastructure to process online applications quickly.

Final Thoughts on How Long It Takes To Get a Personal Loan

Remember, whether it takes you a day or a week to be approved for a loan, you’ll likely be paying it back for years. Even if you’re in a hurry to get the money, do your due diligence before committing to the loan. Shop around for the best deal you can find and make absolutely certain you can afford to pay the loan back.