How long does it take to get a loan?

When You Need Money Quickly

When life throws you surprises, it’s helpful to know where you can get money quickly and how long it takes to get a loan from various sources. Money can assist you in covering repair costs, financing healthcare, or resolving other issues. So what should you expect when you apply for a loan and are in a hurry?

How Long Does It Take to Get a Loan?

While each lender may have its own specific process, here’s an overview of what you might expect when considering a personal loan from an online lender, traditional bank, or credit union. However, the time it takes to obtain a personal loan may depend on your financial situation.

Online Lenders

Online lenders typically have a quick and easy application process, but it may take a few days for the money to arrive in your bank account. If you have limited time to research and fill out applications but can wait a few days for the money to hit your account, an online lender might be an excellent option.

Application Time

With most online lenders, applying for a loan takes just a few minutes. You’ll provide basic information such as your Social Security number and details about your income, and you’ll receive a preliminary rate offer. If you decide to move forward, the lender will verify your information and assess your application.

Approval Time

Typically, it takes online lenders several days to approve a loan application. For example, Upstart estimates it takes three to four days for review. Prosper expects it to take about five business days.

Funding After Approval

Once approved, lenders will transfer your loan amount, often to your bank account. Again, this process can take several days, depending on bank holidays, how quickly your bank clears the deposit into your account, and other factors. Upstart can fund your bank account the next business day after you accept your loan offer. LendingClub simply states that transfers can take a few days. Check with your bank to see when those funds will be available for spending.

Banks and Credit Unions

You can also borrow from banks and credit unions (or their online counterparts). These institutions can sometimes fund your loan in one day, although the speed varies from bank to bank. If you have access to several banks, ask each one how long it takes to get a loan and choose the best option.

Application Time

Depending on your lender, you may fill out an online form, use a traditional paper application, or complete the application with a bank representative. When filling out a paper form, there is no immediate verification of data, so it’s easy to submit an incomplete application. The form may also ask various questions that may seem irrelevant. Take your time filling out the application regardless of the method to ensure it’s complete. This could help speed up the process.

Approval Time

With some lenders, you may receive funds on the same day you apply for the loan. This is a perk if you need money quickly, but remember that some banks take several business days to review your application. You’ll need to support the information you provide to the lender, and the bank will review your credit history. This process takes time, but it can be completed in one business day, provided team members have the capacity to finalize your application.

Funding After Approval

A bank can fund your account on the same day you’re approved. It might take one day for some banks, while it could take longer for others.

Tips

For Quick Approval

To help things move as quickly as possible, be prepared before applying and choose lenders wisely.

Gather Information

Lenders may need to verify your identity and financial details when reviewing your application. The sooner you provide this information, the quicker they can proceed. Know what documents and details your lender needs so you can submit a complete application. Examples may include a valid driver’s license number or passport number, total income from all sources, proof of income such as pay stubs or information about your employer, and information about your monthly expenses.

Check Your Credit Report

Issues with your credit report can lower your scores and cause denials, and sometimes these problems are just mistakes. You can fix errors on your credit report, but it may take several weeks or months, so review your credit report before applying for a loan.

Choose the Right Lender

Select a lender who can provide financing when you need it. Research, call, or chat online with customer service representatives to find out how long it takes to get a loan. Also, choose a lender you believe you will qualify for a loan from. Some lenders prefer applicants with higher credit scores, while others are willing to work with borrowers with less-than-perfect credit.

Apply as Soon as Possible

Remember that lenders need time to review your application, verify details, and fund your loan. Especially if you are trying to get funding on the same day, it’s good to apply early in the day. Online lenders may have many applicants applying simultaneously, which can cause delays, so do this as soon as you decide on a lender.

Complete Everything

Ensure that your application is complete and accurate. Errors or questions can cause additional delays. If you are unsure how to answer a question, contact the lender and ask them.

What to Be Cautious About

When speed is crucial, you may have to pay more money. Faster loans available may have high rates and fees. While you can resolve an immediate issue using products like personal loans, you should be cautious about borrowing money that will be difficult to repay and could cause financial problems.

To compare loans, try using a personal loan calculator to discover your monthly payments. Experiment with different rates to see how much the monthly payment varies.

Some scammers may target individuals who are feeling desperate for money. Beware of misleading promises, especially if you have been denied by a traditional lender or if you are told that you need to wait longer than you want to get the funds. Unfortunately, paying upfront fees is a direct sign of fraud. Some personal loans may charge setup fees, but those fees are deducted from your loan proceeds after approval.

Conclusion

Whether you’re interested in obtaining a personal loan to help consolidate debts or pay for a home improvement project, explore all your options. Consult your bank as well as online lenders and credit unions to determine which loan is right for you. Be prepared with personal information at hand to expedite the process, and be wary of consumer loans or scams with high fees. In the end, you may get the money you need within just a few days.

Questions

Trading

What credit score do I need to qualify for a personal loan?

A fair credit score generally ranges from 580 to 669. Lenders typically prefer to work with individuals who have higher credit scores. If you don’t have perfect credit, there are still lenders willing to work with you.

What are installment personal loans?

Installment personal loans are a type of personal loan that comes with strict payment schedules attached to them. Some personal loans do not have these deadlines, such as auto loans or mortgages. These loans are usually larger than the personal loans you might need to cover unforeseen expenses.

Source: https://www.thebalancemoney.com/how-long-does-it-take-to-get-a-loan-4783332