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How long does it take to get a personal loan?

Some lenders can fund a loan the day you apply

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Written by Sandy Baker
Edited by Sally Jones
JG Wentworth Structured Settlements and Best Egg
man receiving money from buisnessman

Personal loans are generally unsecured loans ranging from $1,000 to $100,000. (Unsecured means you don’t have to put up anything of value as collateral.) The loan is repaid over a specified period, usually one to seven years, with interest. Rates vary from roughly 3% to 36%, depending on your credit score, but the average rate for people with excellent credit is between 10.3% and 12.5% — much lower than for a credit card.

“The rise of fintechs has made getting a personal loan easy,” explains Joel Ohman, CFP, CEO of Clearsurance. “Instead of applying in person at a bank, people can apply online and get almost instant approval. As a result, it’s so easy to get a personal loan that people can get one on a whim.”

Banks, lenders and credit bureaus have your data at their fingertips — literally. They enter your info with a few keystrokes, and they can perform due diligence on your financial situation and respond in record time.

Key insights

  • Personal loan interest rates are generally better than credit card rates.
  • Most lenders can approve a personal loan within 7 days.
  • Some fintech lenders can approve a personal loan application online the same day you apply, and a few also offer same-day funding.

What are personal loans good for?

“Personal loans are impactful,” said Janet Patterson, a loan and finance expert from Highway Title Loans. “Consumers use personal loans for a wedding, for consolidating costly credit card balances, paying off debts and medical bills, or for any other emergency.”

A reviewer on our site from Sidney, Montana, used a personal loan to get ahead of runaway credit card debt that was beginning to affect their credit score.

“I just had an astronomical amount of debt on credit cards and I wasn't making any headway with them,” they said. “I was barely making minimum payments.”

This reviewer did some research and ended up consolidating their debt with a personal loan from JG Wentworth. “They were very easy to work with,” the reviewer said. “My credit has actually already started to come back up.”

“Personal loans usually have a low APR and can save you on interest,” explains Patterson. “These loans are ideal for debt consolidation, such as student loans. So, you don't have to worry about making multiple payments at various interest rates. Instead, you'll just have to pay off one debt. Personal loans also tend to improve your credit score, making you feel more financially secure and stable.”

How long does it take to get approved for a loan?

Getting a personal loan requires a formal application process. But it takes far less time than applying for a secured loan, such as a mortgage, because there are fewer steps. The time from application to approval varies, but some online lenders can approve a personal loan within a day.

These are just a few steps to getting a personal loan:

  1. Determine how much you need to borrow and if you want a secured or unsecured loan.
  2. Check your credit (even though any lender will do this when you apply). People with lower credit scores are more likely to need either smaller or secured loans.
  3. Compare rates and loan terms from several lenders, getting pre-qualified or preapproved as necessary.
  4. Choose a lender and complete the application, providing all the information required, such as copies of your pay stubs or W-2.
  5. If you’re approved, sign the contract and set up the process for receiving the funds.

In most situations, an online lender will turn an application around faster than a traditional bank. But it’s worth inquiring first at the institution where you do your banking; it may offer preferred interest rates to existing customers — and most banks now have an online application process too.

The process of applying for a personal loan varies. Traditional lenders typically require an online or in-person application, with questions about your identity, credit history, income and expenses. They may also ask if you own or rent your home and request information about your employer to prove your income.

Some lenders offer pre-qualification or preapproval, which means they run a “soft” credit check to determine if you qualify for the loan. This does not impact your credit score. A more formal “hard” credit check may happen later in the process.

Fintech lenders may ask for your Social Security number and permission to look at your bank account — and then they’ll likely let you know the same day whether you’re approved.

How long does it take to get the money from a personal loan?

You can expect to get the funds from a personal loan anywhere from the same day to several days after approval, depending on the lender.

The lending industry is very competitive right now; they want your business. “Higher interest rates have started to cool the market down,” according to Melanie Hanson, research analyst and editor-in-chief at EDI Refinance. “For the most part, lenders are very eager to get borrowers set up with any kind of financing they're interested in, including personal loans.”

“Getting approved for between $5,000 and $15,000 is not uncommon,” she said. “Companies like Best Egg that specialize in debt consolidation loans are going to be able to offer higher loan amounts, but you should be ready to pay a higher interest rate.”

Online lenders

Online lenders tend to work at a fast pace due to fewer obstacles in getting funds to borrowers. Often, approval is fast — sometimes on the same day you apply. However, your bank may delay when you actually get access to the funds.

Banks and credit unions

Banks and credit unions typically require a bit more time with applications, often taking up to a week to make decisions on whether to lend. Funding the loan may then take another few days to a week after you’re approved.

However, some are more versed and technologically advanced, which can speed up the process, and if you have a long-term relationship with your bank or credit union, it may approve your loan immediately.

How to avoid delaying your loan

There are things you can do to avoid delays in the approval process. Mainly, make sure to have all the necessary documents ready, and ensure the information you submit is accurate.

Requirements vary, but traditional lenders may want to see your:

  • ID
  • Social Security number
  • W-2
  • Pay stubs
  • Bank statements
  • Proof of address

Some will also want to see documentation of your living expenses — such as your mortgage (or rent), car payment, student loan(s) and other debts.

Double-check your application for accuracy. Don't assume you recall the correct figures — verify the information from your actual paycheck or bills. By providing lenders with accurate information from the start, you can potentially avoid having to start again.

What credit score do you need for a personal loan?

Your credit score is one of the main factors lenders look at to determine if they'll lend to you. If you have a low credit score or a young credit history, it can limit your access to a personal loan. On the other hand, the higher your credit score, the more likely you are to be approved.

Many lenders will only approve you for a loan with a good rate if your credit score is 670 or higher. It's still possible to get a personal loan when you have a credit score under 670, but the lender may want to see that you have a high income and a low debt-to-income ratio to compensate. Even then, the APR on your loan may be higher than you’d like. So, it’s worth spending a bit of time trying to improve your score before borrowing.

Bottom line

The typical waiting period for personal loan approval is one to seven days. Fintech lenders can make same-day decisions, while traditional banks may take longer. And you’ll have the money in your bank account quickly after that, often within a day to a week. The important thing is to find the right lender, and that means comparing loan options, terms and APRs from several lenders before making your decision.

ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. To learn more about the content on our site, visit our FAQ page.
  1. National Credit Union Administration (NCUA), “Personal Loans: Secured vs. Unsecured.” Accessed May 16, 2022.
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