How Long Does It Take To Get A Personal Loan?

If you’re getting a personal loan, it’s important to have a clear grasp of the loan approval process and timeline. While you can’t control how long a loan approval takes, you can choose a lender known for faster funding times. As you research, you’ll likely find that the larger the financial institution and the more digitized and centralized its lending process, the quicker you’ll receive your money.

Let’s take a look at how long it takes to get a loan approved, from application to funding. Then, we’ll consider some ways to expedite the process.

How Long It Takes To Get A Loan At Every Step

If you’re wondering how long a loan takes to process after you’ve done your part, the answer likely hinges on the type of lender you choose. Generally, you can expect the funds to be deposited within a few days to a week, but it always depends on the institution. For that reason, in the table below, we’ve broken down personal loan approval time and funding time by lender type.

Online Lender

• Approval time: Same day to 3 business days
• Funding time: Same day to 5 business days

Online lenders are known for their swift turnaround times. In many cases, you can expect to receive a response within 1 to 2 business days of submitting your application. A 2019 study found that online lenders with centralized underwriting efforts process home loan applications 20% faster than other lenders. However, keep in mind that approval times can still vary depending on your creditworthiness and the lender’s specific requirements.

Once your personal loan is approved with an online lender, the funding process is also expedited. In many instances, you can receive the loan funds in your bank account within the same business day or a day or two. Some online lenders even offer same-day loan approval and funding to qualifying borrowers.

Rocket Loans^SM offers same-day funding for qualifying clients completing the loan process and signing the promissory note by 1:00 p.m. ET on a business day.

Bank

• Approval time: 1 to 7 business days
• Funding time: 1 to 7 business days

Bank approval time for a personal loan can be more extended than the approval time of online lenders. It’s common to wait a week or more for a bank response, then wait a few more business days to receive funding. Traditional banks tend to follow rigorous internal processes, leading to longer wait times as underwriters review your credit history, income and other aspects of your finances.

That said, if you already have a good relationship with a bank, you may be able to receive funding within a day or two.

Credit Union

• Approval time: Same day for members
• Funding time: 1 to 7 business days

Similar to banks, credit unions generally have a thorough approval process. If you’re already a member of a credit union, you’re likely to receive loan approval on the same day with funds hitting your bank account within 7 business days. Because credit unions are nonprofit organizations, they typically offer competitive rates worth waiting for if you have the time.

If you’re not already a member of the credit union, your loan timeline will be extended by the member approval process.

Tips To Speed Up The Loan Process

Now that you know the steps involved, let’s explore some strategies for expediting receipt of a personal loan:

• Check your credit report. Before applying for a personal loan, review your credit report and credit score. A higher credit score can lead to a faster approval and better interest rate. Take steps to improve your credit score, especially if it’s under 670.
• Prepare documentation. Gather all the necessary documents before applying. This includes proof of identity, income and employment. Having these readily available can speed up the application process.
• Choose an online lender. Online lenders tend to have quicker turnaround times than traditional banks. If time is of the essence, consider online options.
• Apply during business hours. Applying during business hours may lead to a quicker response. Lenders often process applications during regular operating hours.
• Consider prequalification. Some lenders offer prequalification, providing an estimate of your loan terms without a hard credit inquiry. It’s a useful way to gauge your eligibility and potential loan terms before the formal application.
• Be responsive. If the lender requests additional information or clarification, respond promptly. Delays in responding to lender inquiries can prolong the approval process.

The Bottom Line

The timeline for getting a personal loan can vary based on multiple factors, including the type of lender you choose and your financial situation. By understanding the steps involved and following the guidelines discussed here, you can expedite the process and boost your chances of approval for the personal loan you need.

Sign up for the Rocket Money^SM app, and we’ll help you keep track of your spending habits and budget for a personal loan’s monthly payment.