How Long Does It Take to Get a Loan? Our Simple Guide

How Long Does It Take for a Loan

When it comes to needing a personal loan, most people need them quickly. If you are facing an unexpected expense that you cannot cover with savings, you need access to funds without delays caused by a tedious loan application process or an unnecessarily long review period from the lender.

There are many different kinds of loans that take time. It’s not often possible to secure a student loan (even a private student loan) or business loan in a short period of time.

However, when it comes to a private loan or personal loan, these can be wrapped up in a matter of days, if not the same day. For borrowers with good credit, the loan approval process will likely take less time than for those who have less than stellar credit scores. Still, even applicants with credit issues can move through the loan process quickly.

Any of us can find ourselves in need of a loan when life throws unexpected curveballs our way. We may need a short-term loan to cover medical bills, a car loan to purchase a new car, or to keep a household afloat after a layoff.

Loans can be secured quickly and managed easily if you understand the basics involved, and we will walk you through that process here.

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Two Ways to Get Your Loan

As we review the ins and outs of the loan application process, we will look at the timing associated with two different types of lenders: online lenders and banks/credit unions.

There are some general assumptions related to the way each of these categories works, though it is still advised to ask each specific lender for their timeline before you get started.

Working With Online Lenders for Personal Loans

One popular option for loans is the use of an online lender. Most of us are accustomed to managing so many aspects of our lives through online platforms, whether that means taking college courses, filing our taxes, or designing a plan for a backyard patio.

Online lenders are a convenient resource for those pressed for time, as you can apply for loan funds any time of night or day. The ability to “shop” the lenders online is also helpful, as you can search for consumer reviews and read up on what other people have experienced using a particular lender.

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The timing will vary from lender to lender, but the basic time frame you can expect is as follows:

Application: The online lender application will take just seconds or minutes to complete for a preapproval. Essentially you are offering your social security number and income for a preliminary rate quote.

Many consumers are cautious about sharing a social security number and other personal details online, and rightfully so. This is why you should take some time to research and verify any personal loan lenders, making sure their site is secure, before sharing any details,

Time Between Application and Approval: If you get a preliminary rate quote from an online lender and wish to move forward, it will take another three to five days for final approval.

Lenders will be taking a closer look at your financial history to determine if they want to assume the risk of offering you a loan. This will involve a detailed look at your credit score and history as well as any other information submitted with your application.

Time Between Approval and Funding: Go ahead and bank on a few more business days before the fund hits your bank. This could be impacted by bank holidays as well, so be sure to confirm with both the lender and your bank.

It would be ill-advised to write the rent check or pay off any debts until you see that the funds have definitely hit your account.

From the time you apply with an online vendor, you could have funding within a few days at best, or it could be up to 10 days or more as you work out the loan term on your funds.

Working with Banks or Credit Unions for Personal Loans

While the convenience of online lenders is a big draw for some borrowers, there is also a significant benefit when it comes to taking the traditional route with banks and credit unions. Nothing compares to in-person customer service.

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By working with a bank or credit union, you can go in and speak directly to a loan officer about your specific needs. This is a great opportunity to review all of the “fine print” associated with loans, and you will have an opportunity to ask for clarification on the loan type, interest, fees, penalties, repayment term, and more.

Best of all, if you use a bank or credit union where you already have a checking account or savings account, you may be able to negotiate better rates. It is also convenient to keep your loan account tied to your checkings and savings, for ease of having things in one central place.

When you log on to your bank’s mobile app, you will have a quick snapshot of your financial situation.

The timing associated with a personal loan from a bank or credit union will typically play out as follows:

Application: The loan application may be filled out in the bank or ahead of time online; check with them first to ensure you have all the right documentation if you are going to fill it out in person.

Time Between Application and Approval: With banks and credit unions it is possible you can get approved on the same day or within one business day. This will depend on their staff available to check all of the information in your application.

Time Between Approval and Funding: If you are already a customer of the bank or credit union and your loan application is accepted, there is a very good chance the funding will be in your account on the same day. In some cases, it may take 1-2 more days.

Final Thoughts on the Time It Takes to Get a Loan

The online lending process is convenient and a good option for those who can wait a week or more for funding. For personal loans with more urgency attached, it is a better idea to apply with a bank or credit union.

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Jen M.

Jen has been with DCCU since she graduated from UW Madison - a long time ago. As the Content Strategist she helps share all the amazing things DCCU does in our community and spreads the credit union philosophy of People Helping People. When she's not working for the best credit union in south central Wisconsin, she's busy with 4 kids and a feisty little dog at home. She formed her family through adoption and has a deep passion to support foster and adoptive parents and kids. Her favorite place to relax is poolside or in front of the fireplace.