How Long Do Personal Loans Take To Process? Quick Guide

Most personal loans take 1 to 7 business days for full approval and disbursement, although some lenders offer same-day funding. Timelines largely depend on the type of financial institution.

For instance, online lenders usually have faster turnaround times than traditional banks or credit unions.

Other factors that can affect the timeline include:

• Prequalification, which may take a few days

• Underwriting requirements

• The loan type and amount

• The borrower's overall credit profile

Learn more about how long it takes to get a personal loan, including ways to speed up the process.

Compare rates, terms and fees from different lenders and choose the best offer for you!

Key Takeaways

• Personal loans typically take one to seven business days to process. The full timeline covers five stages: application, prequalification, underwriting, final approval and funding — with each stage adding time depending on the lender and your financial profile.

• Online lenders are generally the fastest option. They can approve and fund loans within one to two business days, while traditional banks and credit unions may take up to seven business days.

• Your own responsiveness plays a big role in the timeline. Submitting complete documentation upfront, responding quickly to lender requests and opting for direct deposit can all help speed up the process.

• Same-day funding is possible but not guaranteed. Some online lenders and fintech apps advertise same-day or next-day funding for qualified borrowers, though delays can stem from incomplete applications, high debt-to-income (DTI) ratios or lender backlogs.

Summary generated by AI, verified by MoneyLion editors

Personal Loan Process: From Application To Receiving Funds

Stage 1: Fill Out the Application — 5 to 10 Minutes

Thanks to modern technology, you can start most personal loan applications online and complete one in minutes.

You'll visit the lender's website and enter how much you'd like to borrow and what you'll be using it for. You'll also plug in the required personal and financial information, including:

• Name

• Physical address

• Email address

• Date of birth

• Social Security number

• Housing and work status

• Income, expense and asset estimates

Note: If you fill out a paper loan application in person, the process may take longer.

Stage 2: Prequalification — 1 to 3 Hours

Some lenders offer prequalification, which uses basic personal information and a soft credit check to provide conditional approval and rate estimates. Given that soft credit checks don't hurt your credit, prequalification allows you to compare offers and find the best available terms.

It can also expedite the application process, as the lender gets a head start on verifying your information.

Prequalification, sometimes referred to as preapproval, is almost always instant, though it doesn't guarantee full approval. You'll still need to complete the lender's underwriting process.

Stage 3: Underwriting and Verification — 1 to 3 Business Days

Lenders will verify your application information and thoroughly assess your creditworthiness — i.e., your ability or likelihood to pay the loan as agreed. They'll conduct a hard credit check and contact your employer to verify income.

At this stage, lenders will ask for:

• State-issued identification, like a driver's license or passport

• A photocopy of your Social Security card

• Recent pay stubs, W-2s and tax returns

• Employment and income verification authorization form

• Bank account statements

• Account number and routing number for loan disbursement

The underwriting and verification process typically takes a few business days, but it can be delayed if you don't submit documents promptly or if the lender requires additional information.

Stage 4: Final Approval — Same-Day to 3 Days

Once underwriting is complete, the lender will send a notice of approval or denial.

You'll receive an official loan agreement outlining the terms and conditions of the loan if you're approved. You'll review and sign this letter to secure final loan approval.

You can complete this step on the same day you receive the loan agreement, though there could potentially be delays if you or the lender aren't able to reach each other.

Stage 5: Funding — Same Day to 5 Business Days

Once you secure final approval, the lender will disburse the funds. Timing depends on the financial institution and how you prefer to receive the money.

• Online lenders typically transmit funds within one to two business days.

• Traditional financial institutions can take longer, especially over weekends and holidays when there are no Automated Clearing House (ACH) transfers.

• Lenders can deposit the money directly into your bank account. Direct deposits usually occur on the same day.

What Can Delay Loan Approval or Funding?

All parties can cause a snag in the process. Here are the most common reasons for delayed loan approval and funding.

Application Issues

• An incomplete application or documentation can lead to a time-consuming back-and-forth with lenders.

• Low-to-no credit can give lenders pause and merit a longer underwriting evaluation.

• High DTI ratios may require additional documentation, such as additional proof of income or a letter explaining that your income is stable.

• Too many recent credit inquiries may lead to additional lender questions about why you've been loan-shopping and whether you plan to take on other financing.

Lender-Related Issues

• A high volume of personal loan requests can lead to a backlog and push back approval times.

• Staffing shortages can cause a similar logjam.

• Stringent underwriting or paperwork requirements take longer to process.

• Submission times can affect timelines, especially if you submit an item after working hours or on weekends, when the lender is unavailable.

Factors Outside of Your Control

• Hard-to-reach employers can delay the verification and underwriting process.

• Public holidays or weekends can cause snags at any point, including funds disbursement, as ACH transfers are unavailable on those days.

• Bank transfer delays can lengthen the disbursement process.

How Different Lenders Compare on Timelines

Not all lenders work on the same timeline. However, you can expect certain commonalities among lender types.

Lender Type and Typical Timelines

Lender Examples

• Online lenders: SoFi® completes most personal loan applications in two days, while Lightstream advertises same-day approval for qualified applicants.

• Credit unions: Alliant Credit Union can provide same-day funding to qualified online applicants. Navy Federal Credit Union can offer same-day financing once a loan is fully approved, although the complete process takes longer. Keep in mind that only credit union members can apply.

• Banks: While banks are known for longer processing times, some can fully approve and fund personal loans more swiftly for checking or savings account members. Citi®, for instance, offers same-day funds to approved loan applicants when you opt for direct deposit into an existing checking account.

• Apps: Using an app like Brigit, Earnin or MoneyLion can offer some benefits if you're a qualifying borrower. For example, MoneyLion's online lending marketplace offers personal loans from partner lenders that you could qualify for within a few hours to a few days.

Tips To Get a Personal Loan Faster

The following strategies can streamline and expedite the personal loan approval process.

Check Your Credit Report

• Uncaught errors or surprise missteps can lead to an unexpected loan denial.

• Check your standing by requesting a free credit report from AnnualCreditReport.com.

• Dispute any errors with the credit bureaus.

Get Prequalified

• Lenders with prequalification technology are known for fast turnaround times.

• Getting prequalified helps you compare offers and find affordable terms.

Apply Online

• Expedite the process by applying to reputable lenders with a track record of fast financing.

• You can get a sense of which one is a good fit by reading reviews on third-party platforms like Trustpilot and the Better Business Bureau (BBB).

Respond Immediately to the Lender's Requests

• The lender can only move as quickly as you do, so keep an eye on your phone or email and respond to any correspondence promptly.

Gather Documentation Ahead of Time

• Before applying, find out exactly what documents and information the lender requires so you can complete and submit the application as quickly as possible.

Choose Direct Deposit

• A lender needs to print and mail alternative disbursements, such as cashier's checks, which lengthens the turnaround time by five to seven business days.

• Direct deposits often occur on the same day as your final loan approval.

What To Do if You Need Money Immediately

If you need fast funding, consider the following:

• Find a lender who advertises same-day approval and fast funding: Online lenders and fintech marketplaces often provide quicker application reviews and funding timelines than traditional banks.

• Consider other options, like credit cards: Credit cards come with a 28-to-55-day window in which you can repay without incurring interest. Be sure to avoid payday loans, however, which charge high fees and have incredibly short terms.

• Ask a friend or relative for a loan: Borrowing from someone you know may help you avoid high interest rates, but it’s important to agree on repayment terms upfront to help prevent strain on the relationship.

• Try emergency cash advance apps: These borrowing apps offer small-dollar, short-term loans that help you bridge gaps between paychecks. Check for fees, limits and subscription requirements.

• Consider getting assistance, such as a debt relief program: If your bills exceed your income, there may be programs that can help with repayment, housing or utilities. Before working with a debt relief company, make sure it’s legitimate and reputable.

FAQs

How long does it take for loans to be approved?

It typically takes between one to seven business days for a loan to be approved, though some lenders offer same-day funding.

What can delay my loan approval?

Common reasons for a loan approval delay include an incomplete application, insufficient documentation or communication issues. You may also face a loan delay if you have a spotty credit profile or inadequate income, as lenders may require more time to assess the terms and approval.

How can I get a personal loan faster?

You can get a personal loan faster by maintaining a strong borrower profile, selecting an online lender known for its quick turnaround times, pre-qualifying and preparing the necessary documentation in advance.

Why is my loan taking so long to get approved?

Your loan approval can take longer if you're applying with a lender that has a long or stringent underwriting process. It can also take longer if your financial profile isn't in tip-top shape. Lenders may require more documentation before they feel comfortable extending a loan.

Which lenders offer same-day personal loans?

Alliant, Citi, Lightstream, SoFi and Upstart are among the top lenders offering same-day personal loans.

Key Terms

• Prequalification: A preliminary step where a lender uses basic information and a soft credit check to provide conditional rate estimates without affecting your credit score.

• Underwriting: The lender's process of verifying your application and assessing your creditworthiness, including a hard credit check and income verification, before issuing a final decision.

• ACH transfer: An electronic bank-to-bank payment method used to disburse loan funds directly into your account. ACH transfers are unavailable on weekends and holidays, which can affect funding timelines.

• DTI ratio: A measure of how much of your gross monthly income goes toward debt payments. A high DTI can slow the approval process and may require additional documentation.

• Hard credit inquiry: A formal credit check that lenders perform during underwriting. Unlike a soft check used in prequalification, a hard inquiry can temporarily lower your credit score.

Summary generated by AI, verified by MoneyLion editors

Sources

• Consumer Financial Protection Bureau. 2024. "What is a home equity line of credit (HELOC)?"

• Consumer Financial Protection Bureau. 2023. "What is a debt-to-income ratio?"