How Long Does It Take to Get a Personal Loan?

Online application is the fastest among the three types. In-person or telephone application through banks or credit unions usually takes longer.

Step 2: Review and Accept the Loan Offer

If your application is approved, a loan agreement containing the loan terms, monthly payments, and APR is forwarded to you. Take your time.

"You have to take time and carefully examine the terms of the loan, the monthly repayment amount, and the APR. Make sure that you select that which suits your needs most financially."

Paul Ricci, CEO of Best Egg

Step 3: Receive Your Funds

Once you've accepted the offer, it's time for the loan funds to start flowing. The quickest way is direct deposit, as some lenders can disburse money within a single day. Paper checks are clearly slower than this.

Personal Loan Approval Time by Lender Type

Not all lenders move at the same speed. Here's a general breakdown of what to expect:

For quicker disbursement times, online lenders are the way to go most of the time. They often have automated processes that do away with manual reviews and help speed things up considerably.

According to Paul Ricci, "The quick approval process of online lenders contrasts with traditional lenders such as banks and credit unions, where the process takes longer and requires a more complicated set of criteria from the borrower."

Key Factors That Affect How Fast You Get a Personal Loan

Loan disbursement time relies greatly on knowing its bottlenecks and how to avoid them.

Your Credit Score

Your credit score holds great importance when it comes to your ability to get a loan. If your credit score falls into the categories of 'good,' 'very good' or 'excellent,' chances are you'll have no trouble at all getting approval.

Put simply: better credit equals faster funding.

How Complete Your Application Is

You must prove your identity, job, income, and residency status. If you have everything needed at the moment of application, your application process will run without a hitch. Otherwise, they'll waste time chasing you down for necessary documentation.

The Lender's Internal Process

There are two types of underwriting – fully automated, which returns an almost instant decision, and manual processing by loan officers, which may take minutes to several business days.

Pro Tip:

You should find out the exact timespans of these processes before submitting your application. Most lenders specify them on their websites. If they don't, remember that.

How to Speed Up Your Personal Loan Application

These tips will help you acquire your personal loan as quickly as possible.

Work on Your Credit Before Applying

First of all, a good credit score means not only more favorable terms but also a shorter waiting period. Here's how to raise your score:

• Pay on time: 

Your payment history accounts for the majority of your score. Paying on time regularly is the most important thing you can do.

• Keep utilization low:

Always try to use less than 30% of your available revolving credit. A high balance adversely affects your score, even if you're paying off the debt.

• Leave old accounts open:

The age of your accounts influences the final score. Make sure your oldest credit cards are active, even if you rarely use them.

• Check for errors:

Any negative entries made incorrectly will hurt your credit score unnecessarily. Scrutinize your report and question any suspicious entries.

Pick the Right Lender From the Start

Investigate potential lenders before contacting them. Find lenders who make it clear they offer quick online applications, quick approvals and direct deposit financing.

However, don't focus exclusively on the speed of your application. Good rates and reliability are important as well.

"Speed is crucial, but transparency is key. You'll make better financial decisions when you know everything about the lending process. This means finding lenders who aren't shy about providing the facts." 

Paul Ricci, CEO of Best Egg

Gather Your Documents Before You Apply

This is one of the most effective strategies for reducing your personal loan processing time. Gather the following documents before applying:

• Identity verification:

Driving license, passport, SSN card, or birth certificate

• Income verification:

Latest pay slip, W-2, 1099 form or banking statement

• Address verification:

Utility payment slip, lease/rent agreement, mortgage papers or tax report

• Banking information:

Direct deposit account details

Pro Tip:

Make sure that all your papers are organized in one folder on your device prior to applying. In case your lender requires some papers, you will be able to upload everything instantly instead of searching for these papers, which will save you hours of time.

Mistakes That Slow Down Your Loan Application

Mistakes are inevitable, but even minor ones may postpone your loan process by several days. Be aware of those:

Skipping a credit check before applying.

In case your credit is problematic and you do not know about it, you will be surprised halfway through filling out your form. You have an opportunity to correct mistakes in advance or prepare yourself for potential problems.

Not comparing lenders.

It takes a little while, but the process of comparison will allow you to select lenders who provide fast loans at decent rates. It is recommended to read some reviews to ensure that you apply to the reputable organization.

Submitting an incomplete application.

This will cause a huge hold-up in your application. The lender will stop, request additional information from you, and wait for you to reply.

As Paul Ricci advises: 

"Lenders have no way other than to put on hold your application until they receive missing documents. Be careful while filling out each field in the form."

Frequently Asked Questions

How long does it take to get approved for a personal loan?

Online lenders usually provide decisions within minutes to a couple of hours, while banks and credit unions usually take 1-3 business days.

How quickly can I get my money after approval?

With direct deposit, the transfer period is usually between 1-3 business days. Some online lenders provide same-day and next-business day transfers.

Can I get a personal loan the same day?

Yes. Some online lenders offer same-day approvals and transfers, especially if you apply early enough in the day, have excellent credit ratings, and have all your documents ready.

What has the biggest impact on my loan timeline?

The type of lender, your credit rating, and the completeness of the application all influence how quickly you receive approval and funding.

Final Thoughts

So, what would be the total process time needed for getting a personal loan? Total process time needed for getting a personal loan normally varies from 1 to 3 days provided that you use online lending organizations and prepare yourself fully. It takes significantly more time when you work with banks or credit unions; sometimes, it can take up to one week.

How do I get a personal loan the fastest? The fastest way to apply for a personal loan would be using online lending organizations and preparing yourself fully as well as having a good credit rating. Remember, to compare all the options you have got beforehand.