How Long Does It Take to Get a Personal Loan?

Sometimes, life throws curveballs at you that just can’t wait, such as an urgent car repair, a vet bill or a time-sensitive expense you didn’t see coming.

If you're thinking about applying for a personal loan to help cover the cost, you’re probably wondering how quickly the money can actually be accessible. Let’s go through how long the approval and funding process usually takes and what you can do to help things move forward more smoothly.

Personal loan approval and funding times

You may be able to get a personal loan quickly, but the exact timing depends on the lender you choose and their approval and funding process. Here’s a breakdown of what you might expect:

Personal loan company

Depending on the lender, you may be able to apply for a personal loan online or at a branch. Typically, you’ll need to provide documentation like proof of identity and income — the exact requirements may vary by lender, and it may take a few days to verify your information.

Although funding times vary, most personal loan lenders typically transfer funds to the borrower’s bank account within three business days after approval, and sometimes even the same day. ¹

At OneMain, it may take as little as one day to get a personal loan, depending on when you submit your application, what documents are necessary and how long it takes for OneMain to review those documents, among other factors. If you apply for a OneMain personal loan and plan on using your bank-issued debit card to receive funds, money can be deposited to your account as soon as an hour after signing the loan agreement documents.^† Funds can also be paid out by direct deposit, which will be available approximately 1-2 banking days after loan closing. A paper check can be issued on the same day as the closing date.

Traditional bank

A traditional lender, like a bank, could take one to three business days to approve a personal loan and three or more business days to fund it.² Banks may also have stricter credit requirements than some other lenders, which might make it harder to get approved if you have less-than-perfect credit.³

If you already have an account with the bank and are in good standing, you may be more likely to be approved.⁴

Credit union

Personal loan approval at a credit union may take one to three business days, and funding may take three or more business days.⁵ If you’re not already a credit union member, you’ll need to join first, and some credit unions don’t let new members take out loans immediately.⁶ However, compared to banks, credit unions are usually more flexible with credit requirements and may offer more competitive interest rates.⁷

Personal loan approval factors

Although the type of lender you apply with could affect how quickly your application can be evaluated, other factors impact the approval process, including the following:

Credit history

Most lenders review your credit history to assess your creditworthiness when evaluating a loan application. If you have less-than-perfect credit, some lenders might use a more rigorous review process to evaluate your application, which can lead to longer wait times.⁸ They may also request additional information from you.

OneMain works with a wide range of customer credit scores and takes your whole financial picture into account to help find a loan that’s right for you.

Type of loan

The type of personal loan you apply for may affect how quickly your application can be evaluated. For instance, secured loans require you to back the loan with collateral, which is something of value, like a car. When you apply for a secured loan, you typically have to provide information and documentation to verify the value, ownership, condition and insurance coverage of your collateral. Because of the extra paperwork, it may take some additional steps to get a secured loan.

A secured loan may boost your borrowing power with a lower interest rate, higher loan amount or longer repayment period (also called the “term of the loan”). If your credit score is less than favorable, a secured loan may also be easier to qualify for than an unsecured loan. Just keep in mind that if you miss payments, the lender has the right to take the collateral to recover their losses.

Unsecured loans, on the other hand, don’t require collateral and are based primarily on your creditworthiness and financial profile. Because there’s no verification process for collateral, an unsecured loan application may take a little less time for lenders to assess and approve than a secured loan.⁹

Application accuracy

Mistakes happen, like filling in the wrong address or misspelling your name, so this could be why your personal loan application is either declined or takes longer to review. The lender may contact you to verify or clarify information on your application, which may add time to the approval process.

Income verification

Lenders verify your income information to ensure you can repay the loan. Some lenders may allow you to set up an online connection to your bank account’s transaction history to help them confirm your paycheck deposits, while others may require you to upload paperwork like pay stubs, investment income and/or tax returns. If your employment status or other proof of income is easy to verify, this step may be quick. If not, getting approved and receiving the money you requested may take a little longer. Likewise, if you have to provide verification for your collateral, the process may take extra time.

Make sure you provide all the important information, like your employer’s contact information, and upload any requested documents, like your check stubs or bank statements, so the lender can easily verify your ability to repay the personal loan.

Tips to help streamline loan processing

While some parts of the loan process are out of your control, there are steps you can take to make sure your application goes as smoothly as possible.

1. Review your credit report

When you apply for a personal loan, lenders look at your credit history, income and debt to determine your eligibility. Before you apply, check your credit score. If it’s lower than you’d like, it could be helpful to pay down some of your debts to make sure your credit score is as strong as possible before you apply for a personal loan. Also, review your credit reports for any mistakes or inaccuracies and correct them before submitting a new loan application.

2. Prequalify

Checking to see if you could prequalify for a personal loan lets you consider your options and budget before you commit. Checking for offers is typically a quick and easy process, but timing does depend on the lender. At OneMain, it only takes a few minutes to see if you prequalify and view available offers — and checking won’t affect your credit score. Prequalification involves a soft credit pull, which doesn’t impact your credit score.

Consider prequalifying with a few lenders, comparing their offers and then choosing the one that best suits your needs. Once you find the right fit, you can submit your loan application. When you apply, the lender then reviews your credit report using a hard credit check, which has a small, temporary impact on your credit score.

3. Gather your documents ahead of time

Collecting paperwork or information while you’re completing a loan application may make the process take longer. Instead, try to gather the documents you need before beginning your loan application. To get a OneMain loan, you’ll need to provide the following:

• Proof of identity (like your driver’s license, state-issued ID card, passport or available third-party verification service)
• Proof of residence (like a driver’s license with current address, utility bill or signed lease)
• Proof of income (such as pay stubs or tax returns)

For a secured loan, you’ll also need to provide verification of your collateral.

Other lenders may have different requirements. Double-check before beginning your application to make sure you have what you need.

4. Review your application carefully

Errors on a loan application, like typos or incorrect information, could delay approval or cause an application to be declined. To avoid this, check that everything is correct before you submit your application, so the lender doesn’t have to ask you to correct any mistakes.

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Lay the groundwork for your loan application

Getting a personal loan doesn’t always mean a long wait to get money, but the timeline can vary based on the lender, the type of loan and how prepared you are when you apply.

By understanding what affects approval and funding times, and taking simple steps like reviewing your credit report, prequalifying and double-checking your application, you could help avoid delays and get the funds you need faster.

Whether you’re handling an unexpected expense or planning something important, a little preparation could go a long way in making the loan process smoother and less stressful.

Sources:

1, 2, 3, 5, 6, 7 https://www.bankrate.com/loans/personal-loans/how-long-does-it-take-to-get-a-personal-loan/#type
4 https://www.bankrate.com/loans/personal-loans/what-do-lenders-look-for-beyond-credit-score/
8 https://finance.yahoo.com/personal-finance/personal-loans/article/how-long-does-it-take-to-get-a-personal-loan-213010800.html
9 https://www.nerdwallet.com/personal-loans/learn/how-long-does-it-take-to-get-a-personal-loan