Ever anxiously refreshed your email waiting for a loan approval? Many borrowers want to know how long does it take to get a personal loan, and the answer isn’t always straightforward.
The good news is that many online lenders can process and fund personal loans in as little as 24 hours, while traditional banks typically take 1-7 business days – or even up to several weeks from application to deposit.
That said, your specific timeline can vary dramatically based on factors like your credit profile, loan amount, and chosen lender. Before you start counting on that cash, here’s what you need to know about personal loan processing times and how to avoid unnecessary delays.
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How long do personal loans take to process?
The time it takes to process a personal loan varies based on the lender, specifically whether it’s a bank, credit union, or online lender. Most online lenders are known for faster loan processing times.
To speed up the process, many lenders offer a quick prequalification check that won’t impact your credit score and can give you an instant rate estimate. In general, processing times can depend on whether your lender needs additional documentation, how quickly you provide requested information, and whether you’ve met all eligibility requirements upfront.
While the initial application process may only take a few minutes, the entire timeline from application to funding typically ranges from 1-3 business days with online lenders, or up to 2 weeks with traditional banks and credit unions. Same-day funding is possible with some online lenders if you apply early in the day and have all your documents ready.
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Personal loan funding timeframes
Not all lenders move at the same speed when it comes to funding personal loans – here’s what you can expect from different types of financial institutions.
Lender type | Typical approval and funding time |
|---|---|
Online lenders | 1 to 3 days |
Banks | 1 to 7 days or more |
Credit unions | 1 to 7 days or more |
Online lenders
Online lenders may be the quickest way to get money when needed. Since you apply online, you don’t waste time visiting the lender in person. Plus, they may have less stringent credit score requirements than banks or credit unions.
Online lenders usually process applications and disburse funds within a few days. Some lenders may fund your personal loan the day you are approved.
Banks
Some banks let you apply for a personal loan online. However, the application process can be longer if the bank requires an in-person visit to apply.
Banks can take up to a week to process your loan application and remit funds to your account. However, if you are an existing customer, the bank could process your application and disburse funds faster.
Credit unions
You must be a credit union member to apply for a personal loan. Like banks, some credit unions accept personal loan applications online. If not, you need to apply in person. Since credit unions usually consider the borrower’s membership history, they may be more willing to approve applicants with lower credit scores. Credit unions can take up to a week to approve your application and disburse your money.
Factors that influence the processing time of a personal loan
Your personal loan approval isn’t just a matter of hitting ‘submit’ on an application – several key factors determine how quickly you’ll get your money.
1. Loan type and amount
The amount of money you want to borrow can affect how quickly your application is processed. Lenders take on risk when loaning money. Borrowing a smaller amount of money could push your application through faster.
With a larger sum, the lender may take extra time to review your application, verify your income, and evaluate whether you can afford the monthly payment.
2. Credit score and history
Lenders look to your credit score and history to understand how likely you are to repay what you owe. They will routinely look at your record of managing past credit and on-time payments.
The approval process may slow down if the lender requests additional documentation to support your loan application if you have delinquent payments or derogatory marks on your credit report.
3. Income and employment verifications
If your income isn’t high enough or you can’t prove consistent employment, the lender may request more information to process your application. You might be asked for paycheck stubs or tax returns, or the lender could expand their employment verification.
4. Internal process of the lending company
Each lender follows their own internal process when making personal loans. Some lenders take more time to review personal loan applications and supporting documents. Online lenders usually need less time to process and approve applications than banks and credit unions.
How to get a personal loan faster
If you plan to take out a personal loan, there are steps you can take to speed up the process.
Make sure your credit score is in good standing
Lenders consider your credit history when evaluating your personal loan application. The lender may charge you a higher interest rate when your credit score isn’t high enough. Or the lender may deny your application. So, before you apply, check your score to determine the likelihood of approval.
Get prequalified
You can find out if you can get approved for a personal loan through pre-qualification. You can find out your potential interest rate and monthly payment. Since there is no hard credit check for you to prequalify, your score doesn’t take a hit.
Gather all necessary documents and information beforehand
Gather the necessary documents before you apply. Lenders usually ask for documents such as a driver’s license or government-issued identification, proof of income, Social Security number, and proof of where you live. Having key documents readily available helps you complete the application faster. Plus, it’s easier to supply copies to your lender if you know where these documents are.
Apply online
Applying online, if the lender allows it, can speed up the process. Avoiding the in-person visit will also save time.
Avoid applying for multiple loans at once
When reviewing your loan application, your credit score could drop when the lender does a hard credit pull. Submitting multiple loan applications could adversely affect your score.
Be honest and accurate in your loan application
The more time the lender needs to review your application, the longer it takes to get your money. Submitting inaccurate information slows down the process.
Avoiding fast processing payday loans
While quick funding can be tempting, payday lenders that advertise “immediate processing” often come with dangerous annual percentage rates (APRs) that can exceed 400%.
These predatory loans can trap borrowers in a cycle of debt, as many struggle to repay the loan plus massive interest by their next paycheck.
Instead of turning to payday loans when you need fast cash, consider safer alternatives like a cash advance, which isn’t a loan but could let you access money you’ve already earned before payday without any interest charges.
You could also explore a 0% APR credit card or talk to your employer about an advance. Learn more ways to get money when you need it ASAP.
Ease Financial Stress with a Personal Loan
A personal loan can help you get the money you need to pay for an emergency expense, consolidate debt or make repairs around your home. Getting a personal loan can take time, but with a little planning, you can boost your chances of securing one quickly.
FAQs
Does my credit score affect how long it takes to process a personal loan?
Low credit scores can delay your personal loan application. Lenders may request additional information or documents when evaluating your credit history.
Can a cosigner help speed up the processing time for a personal loan application?
A cosigner can give lenders greater assurance they will be repaid. Adding a cosigner with a good credit score and history to your personal loan application can speed up the processing time.
Is there a difference in processing times for secured versus unsecured personal loans?
With a secured personal loan, the lender holds something of value as a guarantee that you’ll repay the funds. Since the lender is less likely to lose their money with a secured personal loan, they may process your application faster.
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