How Long It Takes to Get a Personal Loan

Personal loans can be beneficial if you need prompt access to funds. However, it’s important to note that the time it takes for loan approval and disbursement varies significantly among lenders. Some financial institutions provide same-day funding, while others might take several days to process a loan application. By knowing how long it takes to obtain a personal loan, you can choose a lender that best aligns with your particular needs and situation.

When applying for personal loans, it’s important to remember that lenders have their own set of processes and timeframes, and how quickly an applicant moves through each phase can impact the overall time it takes to obtain funds. Generally, there are three main steps involved in getting a personal loan, with each taking a varying amount of time to complete:

The time it takes to receive funds from a personal loan can vary significantly, generally ranging from the day you apply to a week or more. How long it takes for a loan to be disbursed largely depends on the type of lender involved. Traditional banks, online lenders and credit unions each operate with distinct processing speeds and protocols, influencing how swiftly they can release the loan amount to borrowers. Understanding these differences is crucial for applicants who have specific time constraints or preferences for when they receive their loan.

Generally, traditional banks take about a week to review and approve a personal loan application. After approval, it can take an additional three to seven days for the funds to be disbursed. Banks typically take longer to disburse loans than online lenders or credit unions because they thoroughly check your financial background to ensure you're a good fit for the loan. Banks typically check your credit score, job or income stability and current amount of debt.

Many banks offer the option to apply for a personal loan online, which can make the initial application quicker and more convenient. However, whether you apply online or in person, the overall time it takes for approval doesn’t change much. Banks will still take their time to review your application and financial situation thoroughly. The loan disbursal process may be faster if you already have an account with the bank, as they already have some of your information on hand.

Online lenders are known for their efficiency and speed in processing personal loan applications. It's common for online lenders to make a decision within 24 hours, and, in some cases, approval may even be instantaneous. Once approved, the disbursement of funds also tends to be swift, often occurring within one to three business days. This short turnaround time makes online lenders popular for those needing funds quickly. The streamlined online application process plays a key role in the speed of loan approval. You can complete your application digitally, often in just a few minutes, and submit all necessary documentation electronically. This saves time and accelerates the review process, allowing online lenders to assess your application and make decisions more quickly. However, it's important to consider that faster access may come with higher interest rates and fees.

When it comes to processing personal loan applications, Credit unions share a similar pace with traditional banks. The approval time for a personal loan at a credit union can range from a few business days to about a week. Once the application is approved, fund dispersal usually takes one to five days.

An important factor with credit unions is that you must be a member to apply for a personal loan. Being a member can sometimes expedite the process, as the credit union already has your financial and personal information. Many credit unions now offer online loan applications, making the process quicker and more convenient. However, for those applying in person, the process may take a few additional days.

Knowing how to expedite the personal loan application process can be invaluable when you need quick funds. Here are some practical tips to help you get a personal loan faster:

Securing a personal loan involves submitting documents required by lenders. These documents are crucial in determining your eligibility and loan terms. Gathering and preparing these ahead of time can help streamline your application process and improve your chances of approval.

MoneyGeek compiled a list of frequently asked questions about personal loans to provide valuable insight and help you make informed decisions.