How Long Does It Take To Get A Personal Loan?

If you suddenly need to cover an emergency expense, such as car repairs or medical bills, a personal loan can be a great option. It pretty much goes without saying that you’ll need the money as soon as possible, though.

If you believe a personal loan is the most appropriate financing option for your situation, it’s important to make sure it can be approved and delivered in the time you need it.

Let’s explore roughly how long it takes to get a personal loan from various lender types so you’ll know exactly what to expect as you potentially consider different sources of funding.

Generally, it’ll take 1 – 7 business days for a traditional bank or credit union to process and deliver a loan to your bank account. This timeline can vary depending on your lender’s particular approval process and whether any issues arise with your application. Some lenders can offer same-day financing to borrowers under special circumstances.

Approval for a personal loan through an online lender could take 1 – 5 business days. It’s possible for a loan to take as long as 30 days to process, but this is a pretty rare occurrence.

How To Know How Long A Loan Will Take To Process

Before seeking a personal loan, it’s a good idea to contact several lenders and find out how long you can expect the process to take (for both approval and disbursal). You should also ask any lender some version of these questions before applying:

• What are your typical repayment term lengths?
• What is your average interest rate and annual percentage rate (APR)?
• How are your repayment schedules laid out?
• What do you charge in origination fees?

If a lender’s responses work for your situation, you’re likely good to proceed with the personal loan process.

Depending on the type of lender you use, the speed of the process could vary significantly – particularly between an online lender versus a bank or credit union.

Here’s a breakdown of the average approval time and funding time for getting a loan from different types of lenders.

Online Lenders

Online lenders typically have the fastest approval and funding times. Applying online, versus in person, typically takes just a few minutes. The approval process after submitting the application is often completed shortly thereafter but could take up to 3 business days.

With most online lenders, you can expect to see your money within 5 business days of loan approval. However, some online platforms, such as Rocket Loans℠, offer personal loan applicants same-day funding with a competitive interest rate and a fair repayment term.¹

Traditional Banks

Traditional banks tend to have a longer approval and distribution process than online lenders. The application process will vary depending on your bank, but the application will either be submitted by paper in the bank or online. Your bank’s lender will then need to review your application to determine your eligibility and how much you potentially qualify for. This can take a few days.

If you have an existing relationship with your bank, that relationship could make the process go faster. However, you may have to wait up to 7 business days to receive funds after loan approval, which itself can take up to 7 business days.

Credit Unions

Credit unions are not-for-profit financial institutions that require membership for their services as well as access to special deals and rates. Like banks, credit unions can take up to 7 business days to process a loan application, and another 7 business days may pass before they disburse your funds.

As with traditional banks, having a long-term relationship with your credit union could expedite the approval and funding process.

Here are a few tips on how you can speed up the personal loan process.

1. Check Your Credit Report

Your credit report can tell you – and a lender – how well you’ve managed any debts you’ve carried prior to submitting your personal loan application. Your credit report will show whether you’re prone to making late payments on credit cards or any other form of credit or loan you’ve had previously.

Besides helping you determine whether your credit profile is strong enough to qualify for a personal loan, checking your credit report will help you determine whether the report has errors or problems that need to be resolved. An error on your credit report can impact your ability to qualify for a personal loan and slow down the process.

2. Know How Much Money You Need

Knowing the loan amount you need to borrow and the monthly payments you can afford can be useful in processing your application smoothly. If you change this amount after the process is underway, it may take longer to qualify and collect your money.

3. Research Lenders With Fast Approval

As noted above, the amount of time needed for approval and funding will depend on the lender type. And, the length of time can also vary by individual lender, so it’s important to shop around and review the interest rate, repayment term and approval process timeline that multiple lenders offer.

For a better idea of what a lender can do for you, prequalify with some of your top lender choices.

4. Get Prequalified

Prequalification doesn’t guarantee approval, but it’s a good sign. It’s also usually fast, and it won’t affect your credit score. Just enter your information into a prequalification form and get your result. If you’re denied, it might be discouraging, but it’ll help you understand personal finance areas you’ll need to improve in before applying again.

5. Have Documentation Ready To Go

Having the proper documents organized and ready to submit can significantly speed along your application process. Personal loan documentation includes:

• Proof of identity (driver’s license, passport or Social Security number)
• Proof of income (pay stubs, bank statements or tax returns)
• Proof of address (utility bills, lease agreement or voter registration card)

6. Apply Online

As mentioned, online applications typically allow for faster processing, with a loan application only taking a few minutes to complete. Most lenders also allow you to track your application online.

Make sure you double-check the information on your application before hitting “submit.” Mistakes can slow down the process considerably.

Sometimes getting a loan faster means being stuck with less appealing loan conditions. Ideally, you’ll find a lender that can get your loan to you quickly without charging an unreasonable interest rate, but many lenders that provide financing on the same day will charge costly fees and allow for only a short repayment period.

The predatory loans discussed next may allow you to get your money faster than you would with a personal loan, but you’re likely to pay a much higher price for borrowing. You should avoid them if you possibly can.

Payday Loans

Payday loans offer short-term financing, often without a credit check and with same-day approval. Their repayment period typically lasts 2 weeks or until the borrower’s next payday at work.

Your interest rate or APR for a payday loan will usually hover around 390%. That’s around $10 – $30 for every $100 you borrow. Borrowing $500 for just 2 weeks could mean you have to repay more than $600.

Pawn Shop Loans

Pawn shop loans, like payday loans, offer same-day funding without a credit check. Unlike payday or personal loans, pawn shop loans are secured by an item of value that you own. The pawnbroker loaning you the funds holds onto this item until you’ve fully repaid the loan. If you can’t repay the loan, the pawnbroker can sell the item to regain the money lost.

Aside from requiring the potential loss of a personal item of value, pawn shop loans charge financing fees that can equal a triple-digit APR.

Car Title Loans

A title loan is another type of loan secured by an item of value, in this case the title to your vehicle. You can borrow up to 50% of your vehicle’s value, but you’ll lose your vehicle to the lender if you can’t repay the loan. APR for title loans can reach 300% after interest, fees and other charges, so you run a high risk of losing your vehicle or getting stuck in a debt cycle.

Personal loans can be a great help in a financial emergency and are readily accessible to many people. Although you may be feeling the pressure, you should carefully research your loan options and compare lenders because that time and effort will likely pay off.

Don’t be tempted by faster loans, either. Otherwise, you could find yourself in a worse financial predicament than you were in originally.

If you’re ready to start discovering your options, apply for a personal loan through Rocket Loans today.

¹Same-day funding is available for clients completing the loan process and signing the Promissory Note by 1:00 p.m. ET on a business day. Also note, the ACH credit will be submitted to your bank the same business day. This may result in same-day funding, but results may vary, and your bank may have rules that limit our ability to credit your account. We are not responsible for delays that may occur due to an incorrect routing number, an incorrect account number or errors of your financial institution.