In many circumstances, obtaining a loan may be the only option that you have to deal with emergencies or take care of specific financial issues. If you are currently thinking about obtaining a loan, one of the most critical questions that you would probably be eager to ask at this moment is “how long does it take to get a loan?” In fact, there is no one-size-fits-all answer to this question as several factors must be duly considered before determining how long it will take you to get a personal loan.
The answer to this question depends largely on the type of lender you have chosen, the standard application process of the lender, your preparedness, and the data you have provided to the lender. Therefore, someone can get a loan from a lender in just a few minutes or hours while it may take some weeks before another person gets a loan from the same or a different lender.
What Are the Requirements for A Loan?
Before providing answers to “how long does it take to get a loan approved?”, it is essential for you to understand the information that the lenders will likely request from you when applying for a loan. The information often requested includes:
- Your full name
- Your date of birth
- Your contact address
- Your phone number
- Driver’s license, government-issued ID card or any other proofs of identity
- Your social security number
- The details of your annual income – these details include pay stubs, bank statements or any other evidence of your income
- Verification of employment
- Your credit history
The information plays a pivotal role in determining whether your loan will be approved or not. Therefore, you should always have the information within your reach before submitting your application for a loan.
How Long Will It Take You to Get A Loan?
Now, let’s discuss the crux of the matter – how long does it take to get a loan? Let’s consider the differences in the time it may take you to get a loan from different types of lenders:
• Bank and credit unions
In most cases, you may have to wait a few weeks to get a loan from a bank or credit union because of their rigorous process of loan approval. Banks and credit unions usually pay most of their attention to your credit score when approving a loan. Sometimes, they may spend days verifying your credit scores and making sure that you are eligible for a loan. Unfortunately, if you don't meet their credit standards for getting a loan, your application will likely be disqualified despite the other information that you have provided.
Notably, they also get several loan applications from different borrowers, so the staff may not be able to attend to your loan application in the first few days of submitting an application.
Another factor that works against getting a quick loan from banks and credit unions is that these financial institutions do not usually utilize state-of-the-art technology for the processing of a loan application. Therefore, their staff will have to take the time to process the multiple loans they have received manually.
Getting the funds is another time-consuming process. After credit unions or banks have approved your application, it may take a few hours or weeks before getting the money you need. Like earlier stated, most of these conventional financial institutions use manual processes; therefore, there may be delays in disbursing the funds to the borrowers. Also, a transfer from one bank to another may also delay receiving your loan. Nevertheless, this may not be the case if you have an existing and functional account with the institution.
• Online direct lenders
So, how long does it take to get a loan approved from an online direct lender? Typically, it takes a few minutes to some business days to get a loan online from direct lenders. If you have all your documents and data available, you can easily and quickly fill out your loan application in a few minutes and start waiting for approval. Although some online direct lenders may take some hours to review and verify your documents and information, most will review them quickly and approve your loan as soon as possible. Also, a few online direct lenders do not require credit history before approving a loan.
As is the case of getting approval, getting your funds may take a few minutes to two business days. You should also know that different online lenders have different processes; therefore, what applies to one lender may not apply to another.
• Peer-to-peer lenders
The process and timing involved in getting approval for a loan application from most peer-to-peer lenders are similar to those of online direct lenders. In just a few minutes or some business days, a peer-to-peer lender may approve your loan as long as you provide the required documents and information on time.
However, the time required to receive the funds after approval from most peer-to-peer lenders is a bit unpredictable. This is because peer-to-peer lenders get funds that will be loaned out from investors. Therefore, the timing for obtaining the funds depends entirely on when the investors release the funds. While you may get funded in less than 24 hours from a few peer-to-peer lenders, most of them will only offer you the funds after one or more business days.
When compared to banks and credit unions, there is a higher possibility of getting a loan earlier from online direct lenders and peer-to-peer lenders.
What Can You Do to Speed Up Your Loan Application?
After providing comprehensive answers to the question “how long does it take to get a loan approved and receive the funds?”, it's equally essential to take note of a few things that can help you speed up your loan application. Generally, your preparedness, eligibility and other personal factors can have a big say in how long it will take you to get a personal loan. So, check out the following things you can do to speed up the time it takes for you to obtain a loan:
• Have a good credit history
Since most lenders favor individuals with a good credit history, you will have a big advantage by ensuring that you have a good credit history. Nonetheless, if you have a poor credit history, you should not give up as some lenders will show you how to get a loan with no credit.
• Verify the eligibility criteria of the lender
Before going ahead to apply for a loan, take your time to check the eligibility criteria of each lender. If you are not eligible for a loan from a lender, do not waste your time to apply; check other lenders that may offer you the loan you need.
• Consider getting a loan from a lender that is known for providing quick loans
Certain lenders are known for approving loans and releasing funds within a short period. Therefore, you should consider those lenders ahead of others. If you don't know of any lenders, check online reviews or ask people around you about any lenders with quick loan approval.
• Get a loan from a lender that you've used before
You have a higher chance of getting a loan from a lender you have banked with or acquired a loan from in the past. If you have used the services of a lender before and maintain a good relationship with them, do not hesitate to submit a loan application to them.
• Provide all required documents and information
Once you've decided that you want to borrow money, gather all the documents and information that are typically requested by the lenders even before contacting any one of them. Also, if the lenders ask you any questions, do not hesitate to provide the right answers.
• Make inquiries when necessary
Rather than assuming that you know the information, documents or process required to submit a loan application and get approval, ask questions. Do not shy away from getting clarifications on anything you do not understand.
• Make sure your application is error-free
Errors will not only delay your application but will also lead to disqualification. You should not be in a hurry to submit your loan application. Take time to verify and proofread your application so that it will be accurate, error-free and clear.
Many banks advertise fast loan approval even though it still takes at least three days to a week for that approval to happen. Also, large banks tend to have large minimum amounts you are required to borrow. It's reasonably safe to say there are no such things as 'same day loans' in the banking industry.
A popular myth in the realm of financial lending is the idea that short-term personal installment loans or title loans are only for those in financially desperate situations. However, this is certainly not the case. Many people who have good credit or are in good financial shape use small loans because they're approved quicker, often come in smaller amounts well below what the bank requires, and can be paid off sooner.
Situations, where this would be advantageous, might include emergency repairs on a building which aren't covered by insurance, low-cost home improvements projects like replacing the carpet. We're sure you get the idea.
Some visit CASH 1 Loans and find out if getting a personal loan can fit your circumstances. The approval process is always the same day, and you will get the best possible interest rate available.