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How Long Does It Take To Get A Personal Loan? – Forbes Advisor

How Long Does It Take To Get A Personal Loan?
Written by Publishing Team

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The amount of time you have to wait to get a personal loan is critical when you need money quickly. If you have to pay rent, schedule an emergency surgery for your dog, or cover unexpected car maintenance costs, you often can’t wait more than a few days. Unfortunately, there is no one-size-fits-all answer: it can vary depending on the lender.

Here’s what we know about how long the process – from application to financing – takes.

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

The process for getting a personal loan depends on the type of lender you use and if you have a direct application or if you have any extenuating circumstances, such as self-employment or a high debt-to-income ratio (DTI).

While most types of lenders share a similar application process, each individual lender has its own approval process, which can vary in the time it takes to obtain a personal loan. Here 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 fast approval times and a simple application process. However, it may take up to five business days to receive your funds. However, some of the best online personal loan lenders offer same day approval and financing.

If you don’t have time to go around and compare loans from different types of lenders, the online lender usually has the quickest process, from applying to being approved for financing.

Banks

Conventional banks are a solid option if you don’t need funds right away and have an existing relationship with an institution. If the bank already understands your reputation as a borrower and you maintain your accounts with that institution, this can help speed up the approval and financing process. Once approved, personal loans from traditional banks usually take up to seven business days to fund.

credit unions

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

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

3 Tips for Fast Personal Loan Approvals

Follow these 3 tips to get quick financing for your personal loan.

1. Clear any errors on your credit report

According to the Federal Trade Commission (FTC), one in five people experiences an error on their credit report that can 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 discover an error, you can dispute it directly with the credit bureau.

You can 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. Usually, you can only check this once per year.

It is essential to check your credit report from all three offices because the information can vary. If you check only one or two, you may not see an error on the Third Office credit report.

RelatedHow to dispute credit report errors easily

2. Know how much you need to borrow

When you pre-qualify for a loan, the lender will ask for the loan amount you want. If this amount changes after pre-qualification, 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 crucial to understand these requirements before applying.

If your income is less than the minimum, you will likely not qualify.

If you don’t meet their credit score requirements, you can ask someone to sign for the personal loan. The co-signer becomes legally liable for the loan if it defaults, which reduces the risk it poses to the lender. Applying with a co-location will make it easier to get a lower interest rate, which could save you hundreds over the life of the loan.

Compare personal loan rates from top lenders

Compare personal loan rates in 2 minutes with Credible.com

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When you need money quickly, finding the right place to get a personal loan is important. 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 credit union.

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