How Long Does It Take to Get a Personal Loan?
If you’re in a financial jam and need funds quickly, an important question that may be at the front of your mind is, “How long does it take to get a personal loan?” Since each lender has its own unique approval and funding process, the time it takes to receive your funds will depend on the lender you choose. Generally, the process can take anywhere from one to 10 business days.
Keep reading as we explore how long it takes to get approved for a personal loan and when you might receive your loan funds.
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How long does it take to get a personal loan?
If your car needs major repairs or you have some large, unexpected medical bills, getting your personal loan funds as quickly as possible may be an important factor for you. When it comes to a lender’s funding timelines, there are two parts to consider:
- Approval timeline: The time it takes for a lender to approve you for a personal loan will impact how long it takes for you to receive those funds. While many personal loan lenders offer prequalification services that allow you to see your interest rates within minutes, official approval could take much longer. Lenders must verify your personal information, and you may need to gather and provide documents to verify your identity, income and residence. This process can take one to three business days, depending on the lender.
- Funding timeline: After a lender officially approves you for a personal loan, next comes the second stage of waiting: getting your money. While some lenders may deposit your funds into your account the same day you’re approved, others may take one business day to as many as seven to disburse your funds. For instance, if a lender uses a peer-to-peer style of lending, it can take several days before your loan is funded, since investors will have to choose whether or not to fund your loan.
General lending timeline by lender type
In some instances, how long it takes to receive a loan will depend on the type of financial institution you are applying to. Here’s what you could expect when it comes to funding with each type of lender.
| Lender type | Approval timeline | Funding timeline |
|---|---|---|
| Banks | One to five business days | One to five business days |
| Credit unions | One to five business days | One to five business days |
| Online lenders | One to three business days | One to five business days |
Banks
Because traditional banks typically have longer waiting times for personal loans, some banks may not be a good option if you’re in need of quick cash. Your bank will need time to review your information, and, in some cases, you may have to visit a branch in person to complete the loan process. If you already have an existing relationship with a bank, however, the process may move along a little more quickly.
Credit unions
To be eligible for a credit union personal loan, many of these non-profit institutions require you to become a member first. This could tack on some extra time to the funding process. However, getting a loan from a credit union may go a bit faster for you if you’re already a member of one.
Online lenders
Getting a personal loan online can, in some cases, be a faster process than going through a bank or credit union because these lenders tend to do everything online. But despite the efficiency of online lenders, it can still take up to five days to receive your money in some instances. Some online lenders, however — such as LightStream — may fund your personal loan the same day you’re approved.
How funding timelines compare among top lenders
How quickly you receive your personal loan will vary from lender to lender. Here’s what funding may look like after you’re approved for a personal loan, depending on the individual lender:
| Lender | Funding timeline |
|---|---|
| Achieve | 1 to 3 business days |
| Best Egg | 1 to 3 business days |
| Happy Money | 3 to 6 business days |
| LendingClub | As soon as 1 business day |
| LendingPoint | As soon as 1 business day |
| LightStream | Same-day funding available |
| OneMain Financial | As soon as 1 business day |
| PenFed Credit Union | 1 to 2 business days |
| Prosper | As soon as 1 business day |
| SoFi | Same-day funding available |
| Upstart | As soon as 1 business day |
Why you should avoid payday loans
If you’re in need of money quickly, it may be tempting to consider a payday loan. After all, payday loans don’t require a credit check and you can get your funds fast.
However, because of predatory lending practices, it is best to avoid payday loans. In particular, payday loan interest rates can get as high as 400%. Factors like this can cause some borrowers to become trapped in a cycle of debt, as many end up having to take out more payday loans to pay off the original debt.
Here are a few basic details you should keep in mind about payday loans:
- Loan amount: Up to $500
- Loan length: Two to four weeks
- APR: 400%
- Credit check: No
Payday loans may seem especially attractive to borrowers with low credit scores, as there are no credit checks involved. However, you may find much better rates and terms through personal loan lenders that offer bad credit loans.
Tips: How can I get a personal loan fast?
While you may just have to play the waiting game with some lenders, there are a few things you can do to potentially help speed up the personal loan funding process.
- Check your credit report for errors: According to an investigation by Consumer Reports, more than one-third of consumers have at least one error on their credit report. These errors can lower your credit score and place some potential roadblocks in your path as you apply for a personal loan. It’s important to check your credit report ahead of time so you can address these mistakes as soon as possible. You can check your credit reports from the three major bureaus (available weekly since the beginning of the coronavirus pandemic) at AnnualCreditReport.com.
- Determine how much money you need: Because personal loans are funded as a lump sum, it’s important to know ahead of time how much money you’ll require so you don’t overspend. Personal loan calculators can help you to estimate how much money you can afford to borrow.
- Gather required documentation beforehand: If you prequalify for a personal loan and decide to move forward with that lender, companies typically require that you offer proof of identity, residence and income. This means that you may need to provide documents including government-issued identification cards, your mortgage or rental agreement, pay stubs and W-2s.
- Compare lenders: By doing your research and shopping around for personal loan lenders, you can hone in on companies that offer features that you like, such as quick funding. LendingTree’s personal loan marketplace can help you to compare lenders and find the right fit for you.
When taking out a personal loan, you’ll generally want to make sure you have a good credit score (at least 670). However, the credit score you need to qualify will depend on the lender. Many lenders offer personal loans for fair credit (credit scores lower than 670), though the best rates are generally reserved for borrowers with strong credit.
As long as you don’t take on too much debt and you’re able to make your monthly payments on time, personal loans can help to improve your credit score over time. When you first take out a loan, however, your lender will conduct a hard-credit inquiry, which can temporarily cause your credit score to go down. But with a history of on-time payments, your credit score can bounce back.
No — unlike mortgages or auto loans, personal loans don’t require that you offer a down payment as long as it’s an unsecured loan. However, if you take out a secured loan, you may have to provide collateral of value such as your vehicle, your home or a savings account.