How Long Does It Take to Get a Personal Loan?

How Long Does It Take To Get a Loan?

While every lender may have its own process, below is an overview of what you may be able to expect when considering a personal loan from both an online lender or a traditional bank or credit union. However, the time it takes for you to secure a personal loan may depend on your specific financial situation.

  Online Lenders Traditional Banks or Credit Unions Overall Speed Three to seven days Same day to several days Application Time Plan for 15 minutes or so Plan for 15 to 60 minutes Approval Time Three to seven days Same day to several days Funding After Approval One to seven business days Same day to several days

Tips for Fast Approval

To help things move as quickly as possible, be prepared before you apply, and select your lenders wisely.

Gather Information

Lenders may need to verify your identity and financial details when reviewing your application. The sooner you provide that information, the sooner they can move forward. Find out what documents and details your lender needs so you can submit a complete application. Examples may include:

  • A valid driver’s license or passport number
  • Amount of total income from all sources
  • Proof of income, such as a pay stub or information about your employer
  • Information about your monthly expenses

Check Your Credit

Problems in your credit report can lower your scores and cause a rejection, and sometimes those problems are just mistakes. You can fix credit report errors, but that can take several weeks or months, so give your credit a once-over before you apply for a loan.

Choose the Right Lender

Select a lender that can provide funding when you need it. Search, call, or chat online with customer service representatives to find out how long it takes to get a loan. Also, choose a lender that you believe you will qualify with. Some lenders prefer applicants with higher credit scores, while others are willing to work with borrowers with less-than-perfect credit.

Apply Sooner Than Later

Remember that lenders must spend time reviewing your application, verifying the details, and funding your loan. Especially if you’re trying for same-day funding, it’s wise to apply early in the day. Online lenders may have several people applying at the same time, which could cause a delay, so get it done as soon as you decide on a lender.

Complete Everything

Make sure your application is thorough and accurate. Mistakes or questions can cause additional delays. If you’re not sure how to answer a question, contact the lender and ask.

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Online lenders: Typically less than 5 days

If you’re looking to get a personal loan quickly, an online lender might be the best option.

Online lenders are non-traditional banking institutions; they may operate entirely online or as an arm of a traditional banking institution. Many online lenders don’t have brick-and-mortar branches, which saves them overhead costs and often allows them to provide competitive products and lower interest rates. But this usually means you can’t visit a local branch if you have a question or want to make a payment on your loan in person.

An online lender’s digital application process may be ideal for tech-savvy or on-the-go borrowers, but online lenders may not be right for those who prefer a paper or in-person loan application.

  • Time to apply — Applying usually takes minutes. You’ll need to provide personal information such as your address, driver’s license number, Social Security number and proof of income.
  • Time to get approved — Approvals can be instant in many cases, if no additional information is needed, or might take just a few hours.
  • When funds get disbursed — You can generally expect funding as soon as the same business day or as long as five business days from approval.

The time it will take you to receive a personal loan from an online lender depends on your application and financial details, when you apply, whether more information is required and how fast your bank processes the transfer. 

For example, Credible partners LightStream and OneMain Financial can fund loans as soon as the same business day that you’re approved. And if you’re approved by 4:30 p.m. Central Time on a weekday, Avant (also a Credible partner) can fund your loan by the next business day.

You can compare personal loan rates using Credible without affecting your credit score.

FAQs

  • The amount of time to get a loan depends on the lender, but it's typically 1-10 days. It might take longer if you're self-employed.

  • Be prepared to provide the lender with proof of identification, income, and residency. Respond quickly to lender requests.

  • Yes, but the fees and interest rates on same-day loans can cost you hundreds of dollars above other loans. It's better to wait a few days for approval on a less expensive loan. If you can, the best way to get a loan is to take your time, compare multiple lenders, and find the best one for you.

Personal documents you need to take out a loan

Lenders will typically require that you submit documentation to verify your information when going through the personal loan process. Here are a few documents you can expect to provide:

  • A loan application: The first step in getting a personal loan is to submit an application to a lender. This form should include your personal information, but also the reason for your loan, your credit score and income. After you turn in your application, your potential lender may contact you to verify the information you have provided.
  • Personal identification: You’ll typically need to prove to lenders that you are who you say you are. You may need to provide government-issued IDs, such as your driver’s license, birth certificate or passport, as well as your social security number.
  • Proof of address: Lenders may want to know where you live so they can send you bills and contact you. You may have to provide documents such as a copy of your lease agreement or utility bill to prove that you live at the address you stated.
  • Proof of income: Lenders want to know that, if they lend you money, they’ll be repaid. Your income can give lenders insight into whether you are able to repay the loan. To verify this, you may have to give documents such as W-2s, pay stubs or tax returns.

Tips for speeding up the process

If you’re looking for a personal loan, you likely want to get your hands on the money as soon as you can. These tips can help you avoid delays when applying for a personal loan”

  • Check your credit report before applying. Know where your credit stands before shopping around for personal loans. Good credit can make it easier to qualify for a personal loan at a lower interest rate. Furthermore, spotting and correcting errors immediately is a simple way to avoid issues later on when you’re applying for a loan. Pay off debt. If you have debt and you don’t need the loan funds urgently, paying some debt off can raise your credit score and lower your DTI ratio, which can increase your chances of approval.
  • Talk to your existing financial institution. Banks and credit unions might be more willing to consider a personal loan application from a customer with whom it’s had a positive, long-standing relationship.
  • Get prequalified. Some lenders have a prequalification process that you can undergo without a hard credit check. You can also get an idea of what your loan rates and terms may be before you apply to determine if moving forward with the lender is worthwhile.
  • Consider online lenders. Many online lenders offer next-day loan decisions, and funds may be deposited into your bank account within a few days after applying if you are approved.
  • Pick loan funds up in person. If your lender has a brick-and-mortar location, ask if there is an option to pick funds up at the branch so you can get the money faster.

Other ways to get a personal loan

Outside of online and traditional banks or credit unions, other places to look for a personal loan include non-traditional products, like payday loans, pawn shop loans or even car title loans. But these types of loans should only be considered as a last resort. 

These non-traditional loans are generally secured. You’ll be required to provide an asset as collateral on the loan, such as your car, jewelry or even a savings account.

But these types of loans will cost significantly more in the long run — thanks to high interest rates and potential fees — and can trap borrowers in a vicious cycle of debt. If you can avoid one of these products, do so at all costs.

Finance charges on payday loans can equate to an annual percentage rate, or APR, of anywhere from 390% to 780% — a far cry from the APR ranges you’re likely to find with a traditional personal loan. In addition to origination fees and other costs, car title loans have average monthly finance charges of 25% or higher, which equates to an APR of 300%.

These loans also offer shorter repayment terms, often just a few weeks or months. If you’re unable to pay off the debt in time, you’ll need to renew or roll over your loan, which can result in compounded interest charges and additional fees.

How Do Personal Loans Affect Your Credit?

Personal loans show up on your credit report and, in turn, affect your credit score. This can be a good thing that helps improve your score if you repay the loan as promised. If you’re using a personal loan to consolidate revolving credit card balances, you could end up significantly reducing your credit utilization rate—something that could help increase your credit score. Having a healthy mix of different types of credit accounts on your credit report can also be good.

However, falling behind on your personal loan payments will reflect negatively on your credit report and drag down your score. At the end of the day, you’re also adding more debt to your name, which could complicate your overall financial health. This impact on your finances can also wind up affecting your credit score. Those who incur new monthly expenses or have a change in income, for example, may find it difficult to keep up with other monthly bills—even if they continue to make good on their personal loan payments.

Before You Apply

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What is the difference between a hard and soft credit inquiry? A hard inquiry is captured on your credit report and indicates to other financial organizations that you have applied for credit. It may also impact your credit score. A soft inquiry does not impact your credit score and can only be seen by you if you request a copy of your credit report.

Step 3: Get Approved

The final step in the loan approval process is to get approved. When you apply for a Best Egg personal loan online, you can find out if you have offers within a few minutes. Once you select an offer, make sure you read all of the information and disclosures.

The loan approval process may also require you to verify the information you entered when you applied for a personal loan. The quickest way to get approved is to have information like a pay stub, bank statements, and a W-2 handy. Once, approved, congrats!

Upon approval for a Best Egg loan, you will be sent an email with all of the important loan details. After that, you can expect to have the money deposited into your bank account in as little as one business day. That’s right, it could take as little as one business day to get a personal loan from Best Egg.

Once you have your money, mark your calendar for your first monthly due date. You can expect your first monthly payment to be 30 days after you’ve been funded. Your Best Egg Welcome Email will detail your official first due date.

Pre-approval vs. final approval

You'll notice that the terms "pre-approval" and "final approval" are both used above. These are two different things, and knowing what they mean will help you understand how personal loans work.

Pre-approval

Let's say you decide to rate shop and want to check out five different lenders. Most lenders run a soft credit check (that doesn't affect your credit score) before letting you know if you qualify for a personal loan. Once you've pre-qualified, they tell you more about the interest rate, annual percentage rate (APR), and terms. This process has no impact on your credit score, which gives you the freedom to check as many lenders as you would like until you find a loan that works for you.

Final approval

Once you've decided that a loan is right for you, it's time to let the lender know that you want to move forward. At this point, the lender runs a final hard credit check. This hard check dings your credit score slightly. Don't worry — the ding can be erased by making your monthly payment on time for several months.

Even if a loan application is pre-approved in minutes, it typically takes from one to 10 business days to receive final approval and the disbursement of funds. If you filled out your application accurately and nothing has changed in the interim, you're only waiting for the lender to verify the information provided.

You will find one thing to be true of any loan: the better prepared you are, the easier the process will be — and the happier you're likely to be with the outcome.

What You Need When Applying for a Loan

Getting approved for a personal loan requires proving that you are both able to make payments, and likely to do so. The first thing that lenders will look at is the application that you submit.

When you apply, you’ll be asked for information such as:

  • Name
  • Address
  • Date of birth
  • Proof of identity, such as a driver’s license
  • Social Security number
  • Annual income
  • Proof of income, such as bank statements or pay stubs
  • Verification of employment

By making sure your application includes all this information and is as accurate as possible, you can improve your chances of qualifying for the loan.

Another major aspect of lending decisions is your credit score. Your credit score is a number that indicates your trustworthiness and how likely you are to actually pay off your debts.

The number is determined by a formula that incorporates multiple factors:

FICO Credit Score Factors and Their Percentages

FICO credit score factors Percentage weight on credit score: What it means:
Payment history 35% Your track record when it comes to making (at least) the minimum payment by the due date.
Amounts owed 30% How much of your borrowing potential is actually being used. Determined by dividing total debt by total credit limits.
Length of credit history 15% The average age of your active credit lines. Longer histories tend to show responsibility with credit.
Credit mix 10% The different types of active credit lines that you handle (e.g., mortgage, credit cards, students loans, etc.)
New credit 10% The new lines of credit that you’ve requested. New credit applications tend to hurt you score temporarily. Learn more about FICO credit score

Improving your credit score can improve your chances of getting approved for a loan. You can improve your credit score by:

  • Paying down your credit card balances
  • Avoid applying for a lot of loans or credit cards
  • Using credit responsibly for a long time
  • Negotiating a pay-for-delete agreement

A pay-for-delete agreement is when you contact a lender that you’ve failed to pay on time.

You offer to pay the debt in full if they remove the mark indicating your failure to pay from your credit report.

Most often, collections agencies are willing to negotiate these agreements. Collections agencies buy your debt from your original lender at a discount. Collecting then becomes their job.

They specialize in getting paid for debts they’ve purchased and pay-for-delete agreements are among the many tools they use.

The final part of getting approved for a loan is your debt-to-income ratio.

The whole point of the loan approval process is for the bank to determine how likely you are to pay your monthly payments.

The more debt you have when compared to your income, the less money you have available to make payments on a new loan. You can better your chances of getting approved by paying down your existing loans or increasing your income.

Online Banks/Lenders Process Loans Much Faster

Many people have turned to online banks and lenders because of the convenience of being able to bank from anywhere.

Some even specialize in fast approval personal loans, making them a popular choice for borrowers.

The process with an online bank or lender is similar to a traditional bank.

You’ll have to submit your application online to begin the process. Once the bank receives the application, the bank will need to review the application and make a decision.

Save time by applying online

One of the major benefits of applying online is that you can submit your paperwork electronically.

You don’t need to gather a lot of paper documents or print out long tax returns. You just need to upload them to the lender’s website.

If you have detailed electronic records of your finances, applying for a loan online can save a lot of time.

How long does it take to get loan approval from an online bank or lender? Online companies that specialize in personal loans can process applications very quickly. Some can approve a loan the same day that you apply!

Once your loan has been approved, you’ll have to wait for the funds to arrive in your account.

This can take a few days, especially if you’re getting a loan from a bank that you don’t have other accounts at.

In an ideal situation, you can get access to the money in just days, making online lenders a good choice if you need cash fast.

Here are some of the best online lenders you can choose from:

How Long Does it Take for a Loan to Process?

On average, it can take anywhere between 1 and 3 business days to process your Best Egg personal loan. The best way to help your loan process as quickly as possible is to have important financial information and documents nearby so you can quickly refer to them if you need to. Once your loan is successfully approved and processed, your money will be sent and deposited into your bank account.

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