How long does it take to get a personal loan? – Forbes Consultant

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The time you have to wait to get a personal loan is crucial when you need money fast. If you have to pay rent, schedule an emergency surgery for your dog, or cover unexpected car maintenance costs, you often can not wait more than a few days. Unfortunately, there is no single answer: it can vary depending on the lender.

See what we know about how long the process takes — from application to funding.

How long does it take to get a personal loan at a glance

The process of getting a personal loan depends on the type of lender you are using and whether you have a simple application or if you have mitigating circumstances, such as being self-employed or having a high Debt to Income (DTI) ratio. .

While most types of lenders share a similar application process, each lender has its own approval process, which can vary the time it takes to get a personal loan. The following is an overview of how long it takes, on average, to get a personal loan from a bank, credit union and online lender.

Online lender

Online lenders usually offer quick approval times and a simple application process. However, it may take up to five business days for you to receive your money. Some of the best online personal loan lenders, however, offer same day approval and financing.

If you do not have much time to shop and compare loans from different types of lenders, an online lender will usually have the fastest process, from application to approval to financing.

Banks

Traditional banks are a solid option if you do not need direct funds and have an existing relationship with an institution. If a bank already understands your reputation as a borrower and you maintain your accounts with this institution, it can help speed up the approval and financing process. Once approved, personal loans from traditional banks usually take up to seven business days to be repaid.

Credit unions

Credit unions target individuals within their communities because membership requires you to live in a specific area. If you do not need direct personal loan funds and are already a member of a local credit union, consider applying for a personal loan through your own. It usually takes up to seven business days for the money to reach your account once approved.

How long does it take to get a personal loan from a top provider?

3 Tips for quick personal loan approvals

Follow these three tips to quickly finance your personal loan.

Clear any credit report errors

According to the Federal Trade Commission (FTC), approx one in five people has an error in their credit report which may affect their ability to qualify for a loan. Before applying for a personal loan, check your credit report with all three credit bureaus to see if there are any errors. If you find an error, you can challenge it directly with your credit bureau.

View your credit report from the three credit bureaus — Experian, Equifax, and TransUnion — at www.AnnualCreditReport.com. Due to the Covid-19 pandemic, you can receive free weekly credit reports until April 20, 2022. Normally, you can only check this once a year.

It is important to check your credit report from all three offices, as information may differ. If you only check one or two, you may not see any errors in the third party credit report.

Related: How To Easily Challenge Credit Reporting Errors

2. Find out how much you need to borrow

When you qualify for a loan, the lender will ask for the desired loan amount. If this amount changes after you qualify, the lender may need more time to process your application based on the details of the new loan.

Make sure you know exactly how much you need to borrow and the monthly payment you can afford before applying for a personal loan.

3. Choose the right lender

Lenders usually have minimum income and credit score requirements and it is important that you understand these requirements before applying.

If your income is below the minimum, you will probably not qualify.

If you do not meet the requirements of the credit score, you can ask someone to co-sign the personal loan. A co-signer becomes legally liable for the loan in the event of default, reducing the risk you pose to the lender. Applying with a co-signer will make it easier for you to get a lower interest rate, which could save you hundreds of dollars over the life of your loan.

Compare personal loan rates from top lenders

Compare personal loan rates in 2 minutes with Credible.com

Conclusion

When you need money fast, it is important to find the right place to get a personal loan. An online lender may be your best bet if you need the funds as soon as possible, otherwise, compare your options with a bank or a credit union.

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