Personal Loans » Advice » How Long Does It Take To Get A Personal Loan
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How Long Does It Take To Get A Personal Loan

The time it takes to get a personal loan is between 1 to 30 days, depending on your lender type. Overall, online lenders are the quickest.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: April 15, 2024
The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: April 15, 2024

The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.

You can trust the integrity of our unbiased, independent editorial staff. We may, however, receive compensation from the issuers of some products mentioned in this article. Transparency is a core value for us, see how we make money.

Table Of Content

If you’re planning on making a major purchase, pay some bills or consolidate your debts, a personal loan could be a viable financial option.

However, if you have immediate plans for your funds, you may be wondering how long does it take to get a personal loan? So, here we’ll delve into this topic in more detail to help you to discover if a personal loan is the right option for you.

How Long Does a Personal Loan Take to Get Approved?

While the application forms for personal loans tend to remain quite similar regardless of whether you’re using a credit union, bank or online lender, the approval times can vary a great deal.

Lender Type
How Long To Get Approved
Online Lenders
5 Minutes – 2 Days
Banks
1 Day – 7 Days
Credit Unions
1 Day – 7 Days

These internet based lenders tend to specialize in personal loans, but some online banks also offer personal loans. There is a plethora of online lenders with some specializing in offering loans for those with poor credit.

This means that the interest rates can vary greatly, but online lenders tend to be the fastest to process loan applications. In fact, some online lenders will provide an approval decision in a matter of minutes after you submit your application.

Just be aware that some online lenders may require at least one or two business days to provide an approval decision.

One of the best reasons to use a bank for your personal loan is that you already have a relationship with the financial institution that holds your bank accounts.

This should make the application a little easier for you, but your bank still needs time to process the application and provide an approval decision.

In most cases, you may need to wait up to seven days to receive an answer about whether you have qualified for the loan. However, some banks do offer pre-approval, so you can check your rate and expedite the approval times if you decide to go ahead with your loan.

Credit unions require applicants to be members before they will entertain a loan application.

In some cases, the credit union may allow you to open a savings account and apply for a personal loan at the same time, but some credit unions require that you’ve held an account for a minimum amount of time before they will consider a loan application. 

Once you’ve met any minimum time or account requirements, you’ll need to complete an application and the credit union team will need to evaluate whether you qualify.

In some cases, you may need to speak to a member of the credit union team to discuss your loan application, but others allow you to apply online. Once your application has been submitted, you can expect a response within seven days.

Personal Loans Funding Time: How Long Does It Take?

One of the main questions to ask before applying is how long until I'll get funded.

There are three primary financial institutions that offer personal loans and how long it will take to get a personal loan will depend on which one you use.

Lender Type
How Long To Get Funded After Approval
Online Lenders
0 – 7 Days
Banks
1 – 7 Days
Credit Unions
1 – 7 Days
  • Online Lenders: Since there are so many different online lenders, the time to receive the funds for a personal loan can vary a great deal. While some may fund a loan in as little as one business day after approval, other lenders may require seven to ten days.

For example, RocketLoans, Upstart and Lightstream advertise funding loans as quickly as the same working day as your loan is approved. So, when you’re shopping around for a personal loan with various online lenders, it is well worth checking the typical funding times before you decide which deal is the best option for you.

  • Banks: Traditional banks tend to be a good go-to if you need a personal loan and have an existing relationship with a particular bank.

However, while your local bank may have all your personal details and hold your checking or savings account, this does not translate into quick funding. After your loan is approved, you may be waiting for up to seven business days to receive the funds.

  • Credit Unions: You’ll need to already have an existing relationship with a credit union to get a personal loan, but like a regular bank, this doesn’t mean that you’ll be able to access the funds quite quickly. Once your loan application has been approved, you can expect the funds within seven business days.

Why Is There a Difference Between Lenders?

We’ve already discussed that the three primary financial institutions offering personal loans are online lenders, banks and credit unions, but you may not be familiar with any differences between these types of lenders.

Most people are familiar with traditional banks, but even the most well-established banks have moved some of their operations online. This means that there may be little to distinguish whether the bank’s personal loans are online or offered through a branch.

With online lenders, it takes a few days to get a personal loan, usually, they are much faster compared to banks and credit unions. 

However, not all online lenders have established banks. There are numerous exclusively online-only lenders. These financial institutions should still adhere to the financial regulations, but they typically just offer lending products rather than checking and savings accounts.

Of course, since these online lenders may not have an established reputation, you’ll need to check that the online lender is legit.

One of the best reasons to use a bank for your personal loan is that you already have a relationship with the financial institution that holds your bank accounts.

This should make the application a little easier for you, but your bank still needs time to process the application and provide an approval decision.

In most cases, you may need to wait up to seven days to receive an answer about whether you have qualified for the loan. However, some banks do offer pre-approval, so you can check your rate and expedite the approval times if you decide to go ahead with your loan.

Credit unions may appear very similar to banks, but the key difference is in its ownership. While banks are owned by and need to answer to their shareholders, credit unions are owned by their members.

While banks need to satisfy their shareholders with great profits, credit unions are more interested in serving its member base. You are likely to find lower borrowing rates, particularly for personal loans.

What Are the Underwriters Looking For?

So, what happens behind the scenes after you submit your personal loan application? Well, it is passed to the underwriting team who check through the application. The underwriters are looking for a number of things to make an approval decision, including:

  • Your Credit: This is one of the first things the underwriters will check to determine if you are a high or a low lending risk. Your credit will impact your chances of being approved and the rate you’re offered.

If you have excellent credit, you will be considered a low lending risk and you’ll be able to access the most competitive rates. Conversely, if you have poor credit, you will be viewed as a high lending risk and pay the highest rates.

  • Your Income: Most lenders have a minimum income requirement to approve a loan. So, the underwriters will be checking to see if you earn a regular income that will indicate that you should be able to consistently make your repayments for the lifetime of the loan.

This is why the underwriters often ask for pay stubs, tax returns or bank statements dating back several months to demonstrate that you have a regular income.

  • Your Current Financial Obligations: The underwriters will also need to check that your income is sufficient to meet not only the new loan repayments but also continue to maintain your current financial obligations. For this reason, it is a good idea to let the lender know if you will be clearing a credit card account with the loan proceeds.
  • The Loan Amount: Finally, the underwriters will check that the loan amount you’ve requested is appropriate for the above criteria and the preferred term. While you may want to keep your monthly repayments low, underwriters tend to look unfavorably on loan applications for small amounts and long terms.

How Can You Get Your Money Faster?

While you may have little control over how long the lender will take to issue your personal loan funds, there are some things that you can do to speed up the entire process. This could help you to get approved more quickly and therefore get access to the funds faster.

  • Check Your Credit: The lending team will evaluate your credit report and credit score to make a lending decision. If you have a track record of making payments on time and you have sufficient disposable income to cover all of your obligations and more, your application will be considered more favorably.

However, there are some lenders that have greater flexibility and are willing to approve personal loan applications for those with less than perfect credit. By checking your credit before you submit an application, you can make sure that you choose a lender who is more likely to decide in your favor.

  • Know Your Loan Amount: When you apply for a personal loan, you’ll be asked for your desired loan amount. So, it is important that you know exactly what amount you need to borrow and how much you can afford to pay each month.

Don’t guess an approximate figure; if you’re consolidating debts, get an up to date balance for all your accounts. If you’re planning a purchase, get some quotes or comparison prices.

  • Check Your Application Details: The lender will need to verify all of your information to make an approval decision, so it can really slow things down if there is an error on your paperwork.

So, before you click submit, take a moment to ensure that you haven’t made any typos or got any important details wrong.

  • Consider pre-approval: If you want to receive a personal loan quickly, you don’t want to waste time with lenders who will not approve your application. Additionally, multiple applications can raise a red flag with any potential lenders.

So, consider pre-approval with your preferred lenders. This will not only reveal your likelihood of being approved with just a soft credit inquiry, but it will expedite your application if you decide to go ahead with the loan

The Bottom Line

How long it takes to get a personal loan can vary a great deal according to the specific lender. If you need your money fast, you may be considered an online lender (preferably one who aren't associated with banks) – online lenders are faster compared to banks and credit union.

So, if you’re in a hurry to access the money, you will need to consider the lender timeframes when you compare personal loans, which will enable you to choose the right lender in the marketplace.

FAQs

You’ll need to support your personal loan application with proof of your ID and proof of your address. Widely accepted forms of proof of ID are government issued ID such as a driver’s license or passport, while for proof of address, you’ll need a utility bill or bank statement.

You may also need to provide proof of your income in the form of pay slips, tax returns or bank statements.

Choose the right lender and check the requirements. You don’t want to waste time applying for a personal loan with a lender who is likely to take longer to approve your loan or who is likely to decline your application.

This depends on the lender. If you’re looking at online lenders, be sure to check their credentials to ensure that they are legit and will adhere to all the federal and state regulations.

Online lenders tend to be the quickest route for personal loans, but if your bank may be able to offer an expedited personal loan process.

Online lenders tend to be less regulated than traditional banks, which allows for more flexible eligibility requirements and faster application processes.

Picture of Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
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