Personal loans can quickly give you the cash you need for whatever comes up. However, the time it takes to get your money can vary from one lender to another. Some lending institutions provide the funds on the same day you apply, while others might take a few days or even up to a week. Knowing how quickly you can obtain a personal loan can help you choose the right lender for your specific needs and situation, ensuring you get your money without unnecessary delays.
How Long It Takes to Get a Personal Loan
Updated: November 1, 2024
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Length of Each Step in a Personal Loan Application
Before you apply for a personal loan, understand that each lender has its own process and timeline. How fast you go through each stage can influence how quickly you get the funds. Generally, getting a personal loan involves three main steps:
- 1
Application
Applying for your loan is your starting point. At this step, you submit personal and financial information to the lender. This includes your name, address, employment details, income and any existing debts. Depending on how complex your application is and how prepared you are with the necessary documents, completing this phase can take anywhere from a few minutes to a few hours.
- 2
Approval
After you submit your application, the lender will review it to assess your creditworthiness. This process involves examining your credit score, income, debt-to-income ratio and other financial details to decide if you are likely to repay the loan. The time it takes for this process can vary widely. Some lenders use automated systems that can approve your application within a few hours, while others may take a few days to conduct a thorough review of your documentation.
- 3
Funding
Once your personal loan is approved, the next step is funding, where the lender disburses the loan amount to your account. The time it takes for you to receive the funds can vary, with some lenders depositing the money into your bank account on the same day of loan approval. Others may take one to seven business days, depending on their processing times and the specifics of your bank.
Personal Loan Approval Time by Lender Type
Understanding the typical approval times for each type of lender can help applicants who need to plan around specific time constraints or have preferences for when they receive their loan to find an option that best fits their financial timeline.
Traditional Banks
Traditional banks typically take a few days to review and approve personal loan applications. This longer processing time is due to their comprehensive evaluation of applicants' financial details, including credit checks and income verification. After approval, the disbursement of funds can take an additional few days. The total time from application to receiving the funds in your account can range from several days to a week, depending on the bank's specific processes and the transaction systems' efficiency.
If you have an existing relationship or account with a traditional bank, it can be beneficial to apply for a personal loan with them due to potential advantages like favorable terms or faster processing. Banks sometimes offer better rates, lower fees and flexible repayment terms to existing customers.
Credit Unions
Credit unions typically review and approve personal loan applications within a few days, which is generally quicker than traditional banks but not as fast as online lenders. A relevant factor to consider is that credit unions require membership to apply for loans, which could add extra time to the overall process if you're not already a member. Once approved, the disbursement of funds can take a few more days, depending on the credit union's internal processes.
Online Lenders
Online lenders are known for their speed in processing personal loan applications, often reviewing and approving them within a matter of hours. This quick turnaround is facilitated by automated systems that efficiently assess applicants' creditworthiness using algorithms and digital data verification. After approval, many online lenders can disburse funds as soon as the same day or by the next business day. It’s worth noting, however, that fast approvals may come with higher interest rates or less favorable terms compared to traditional lenders.
Average Funding Time of Personal Loan Lenders
We analyzed 27 personal loan lenders in our database and found that the average time it takes for borrowers to receive their funds is two days. Our analysis included lending institutions that provide same-day and next-day funding, as well as those that take up to seven business days to disburse loan funds.
We’ve provided information below on lenders who span the gamut of funding times so you can get a sense for how terms and conditions vary.
- Alliant Credit Union
- 10.99% to 13.99%APR Range
- UndisclosedMinimum Credit Score
- $1,000 to $100,000Loan Amount Range
- 12 to 60 monthsRepayment Terms
- Same DayTime to Receive Funds
Alliant Credit Union offers personal loans up to $100,000 with repayment terms ranging from 12 to 60 months and interest rates between 10.99% and 13.99% APR. It typically provides same-day funding following loan approval. Additionally, borrowers benefit from no origination fees or prepayment penalties and can receive a 0.4% discount on their rate by setting up autopay. However, it's important to note that you must be a member of Alliant Credit Union for at least 90 days before you can apply for a personal loan.
Pros
- Borrow up to $100,000
- No origination or prepayment fees
- Has autopay discount
Cons
- Need to be a member for at least 90 days to apply
- Doesn't disclose qualification requirements
- No soft credit inquiries
- Axos
- 11.79% to 20.84%APR Range
- 730Minimum Credit Score
- $7,000 to $50,000Loan Amount Range
- 36 to 72 monthsRepayment Terms
- 1 to 3 Business DaysTime to Receive Funds
Axos Bank offers personal loans ranging from $7,000 to $50,000 with repayment terms of 36 to 72 months. Interest rates for these loans vary from 11.79% to 20.84% APR, and funds are typically disbursed within two days after loan approval. While Axos Bank does not impose prepayment penalties, borrowers should be aware of origination fees ranging from 1% to 2%. To qualify for a loan, you must have a minimum credit score of 730.
Pros
- No prepayment penalties
- Conducts soft credit inquiries
- Option to change your payment due date
Cons
- Minimum credit score requirement of 730
- Charges an origination fee of 1% to 2%
- Doesn't allow co-signers
- Laurel Road
- 9.49% to 24.50%APR Range
- UndisclosedMinimum Credit Score
- $5,000 to $45,000Loan Amount Range
- 36 to 60 monthsRepayment Terms
- Within 7 DaysTime to Receive Funds
Laurel Road offers personal loans from $5,000 to $45,000 with repayment terms of 36 to 60 months. These loans come with interest rates between 9.49% and 24.50%, and borrowers can benefit from a 0.25% discount by setting up autopay. Typically, the funding time for these loans can take up to seven business days. Laurel Road does not charge origination fees or prepayment penalties, but there is a $20 nonsufficient funds fee and a late fee of either $5 or $28.
Pros
- Offers 0.25% autopay discount
- No origination fees or prepayment penalties
- Option to change payment due date
Cons
- High minimum loan amount
- Late fee of $5 or $28
- Charges a $20 nonsufficient funds fee
How to Get a Personal Loan Fast
You can reduce the wait time for needed funds and address your financial needs more quickly by following some of these steps:
Review Your Credit Score Before Applying
Knowing your credit score beforehand helps you understand your loan eligibility and the terms you might receive. A good credit score can expedite the approval process as lenders spend less time assessing your creditworthiness. If your score is lower than expected, you can take steps to improve it before applying, reducing the likelihood of delays due to credit issues.
Get Prequalified
Prequalification provides a snapshot of the loan amounts, rates and terms you might qualify for, all without impacting your credit score. This step not only speeds up the actual loan application process since much of the preliminary assessment is already done but also allows you to shop around quickly for the best deal. Plus, it prevents you from applying for loans that you are likely to be denied, saving time and effort.
Prepare Necessary Documents Beforehand
Having documents such as proof of income, employment verification and identification ready before applying can speed up the application process. By gathering these early, you prevent delays that occur when a lender requests additional paperwork to verify your income and identity.
Apply Online
Online applications are typically processed more quickly than paper applications sent by mail or handled in person. Digital platforms allow for faster data processing and immediate submission, cutting down on the time it takes for lenders to receive and review your application. Additionally, online lenders often utilize automated underwriting systems that can approve applications almost instantaneously.
Ensure Your Application Is Correct
Double-checking your application for accuracy ensures that there are no errors or omissions that could lead to additional communication and clarification needs, which slows down the approval process. By ensuring everything is filled out correctly, you help streamline the verification and decision phases.
AVOID PAYDAY LOANS
When seeking quick funds, it's wise to avoid payday loans despite their fast funding and no-credit-check appeal. Payday loans come with shorter repayment terms and significantly higher interest rates, which can lead to a cycle of debt that's challenging to escape.
FAQ About Personal Loans
We compiled answers to some frequently asked questions about personal loans to provide valuable insight and help you make informed decisions.
How does my credit score affect my personal loan application?
Your credit score is a key factor in determining your eligibility for a personal loan. It influences not only the approval decision but also the interest rate you are offered. A higher credit score indicates lower risk to the lender, often resulting in more favorable terms, including lower interest rates and larger loan amounts.
Can I apply for a personal loan if I'm self-employed?
Yes, self-employed individuals can apply for personal loans. However, you may need to provide additional documentation to prove your income stability, such as tax returns, bank statements and profit and loss statements. Lenders may also scrutinize your financial stability and business longevity more closely. Note that lenders may have specific requirements for the length of time an applicant has been self-employed.
How long does it take to get approved for a personal loan?
The approval time can vary significantly depending on the lender and your personal financial situation. Online lenders can sometimes offer instant or same-day approval, while traditional banks may take several days to a week to thoroughly review an application.
What should I do if I find errors in my loan application?
If you notice errors on your application after submission, contact the lender immediately to correct them. Promptly correcting any inaccuracies can prevent delays in the approval process and help avoid potential issues with loan disbursement.
What happens if my personal loan application is rejected?
If your application is rejected, the lender will typically provide a reason, such as a low credit score or insufficient income. You can address these issues, perhaps by improving your credit score or reducing your debt, and reapply. Alternatively, you can try applying with a different lender or consider a co-signer.
About Zachary Romeo, CBCA
Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production.
Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.
The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available.
Editorial Disclosure: Opinions, reviews, analyses and recommendations are the author’s alone and have not been reviewed, endorsed or approved by any bank, lender or other entity. Learn more about
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