When you don’t have a lot of money, there is one thing that can help you get the additional amount that you need – a personal loan. But despite being useful, many people worry that they may have to wait too long until they will be able to receive their loan. So, how long does it take to get a personal loan? You will find out below.
3 Types of Personal Loan Lenders
In Q1 2019, there has been a personal loan balance boost. It reached a new high, respectively $143 billion. But not all the loans that helped reach this balance have been borrowed from the same type of lenders. In fact, there are three main types of personal loan lenders that you should know of, and they are:
Online lenders are the ones that are the easiest to reach out to when you really need some quick cash. You just have to fill out an online application and wait to see if the lender agrees to give you the loan.
The good thing is that they are also the fastest option when you need a loan. It will take just a few minutes to fill out the application, especially if you already have the other necessary documents to complete the process. Some lenders look over it immediately and grant you the loan very quickly, while others will want to check out your application before asking for documents. Still, it’s faster than the other methods.
After getting the loan, you can also set up monthly payments online.
Also known as social lending, peer-to-peer lending includes getting loans from another individual, rather than a financial institution. As for the time it takes, this method is a little more time-consuming compared to online lending.
Thankfully, there are some happier cases where, if you already have all the required documents, your application gets approved much earlier.
Banks and Credit Unions
When taking loans from credit unions or banks, the process takes longer due to the fact that it is the staff that underwrites loans. Therefore, there is no advanced technology that can help you get the process done much quicker.
Loan Approvals and Disbursement
Loan approvals and disbursements are two different processes. In order to understand why it takes some time until you receive the loan, you need to know more about these processes. Here is what you should be aware of:
The loan approval process is when your loan application gets approved. The process starts by having the bank or lender check for any potential red flags. These indicate that they should not lend money to you. The lender will proceed by looking at your financial situation, as well as your income, assets, and debt.
Next, you fill out a loan application where you give some basic information, such as your employment history, credit rating, debts, and anything of the sort. You will also need to provide proof of your income, such as your bank statements, mutual funds, W-2 and more. If you are a permanent resident and want a student loan, a green card will also be required.
Afterward, your loan will be processed as the lender reviews all of your information. You may be asked for clarifications in case any problem is noticed. Otherwise, the process will go on and if the lender thinks you are a good choice for receiving a loan, then you will be approved.
Loan disbursement refers to the process of giving you the money after your loan application has been approved. So, this means that the money is transferred into your account during this process.
Loan Approval and Disbursement with Online Lenders
We’ve already established that online lenders are the fastest option when you need quick access to some funds. But what is the exact amount of time that it takes to get that cash? Here is what you need to know about loan approval and disbursement with online lenders.
How Long to Get Approved for a Personal Loan with an Online Lender?
Getting approved for a personal loan with an online lender can take no more than a day, as long as you are doing it during a business day. The application process is done very quickly, in a matter of minutes at some points. As applications are easy to fill out and complete, you just need to have the necessary documentation that some lenders check out on the spot.
How Long for Loan Disbursal with a Personal Loan with an Online Lender?
Disbursal is very quick too. In only one or two days, you will see your cash deposited into your bank account. It’s an amazing solution when you can’t afford to waste time until you get your money.
Loan Approval and Disbursement with a Peer-to-Peer Lender
Peer-to-peer lenders are different compared to online lenders, so it isn’t too big of a surprise that it takes a different amount of time for approval and disbursal. Here is what you should keep in mind.
How Long to Get Approved for a Personal Loan with a Peer-to-Peer Lender?
The application process takes a little longer, as you will have to provide personal information that is meant to help your case. Sometimes, the lender will also ask you about your plans with the money. It could be for pilot training, or to pay for your studies. In any case, the better the reason, the more chances you have to take out the loan.
Afterward, the lender needs to check your credit and see if you’re eligible.
How Long for Loan Disbursal with a Personal Loan with a Peer-to-Peer Lender?
Disbursal typically takes between one day and a week. While some lenders take less, they do require more time than online lenders.
Loan Approval and Disbursement with Banks and Credit Unions
Banks and credit unions take the longest to give you your cash. But exactly how long does it take to get a personal loan with banks and credit unions?
How Long to Get Approved for a Personal Loan with Banks and Credit Unions?
If you want to take a loan yet you don’t have an account with the credit union or bank, then it will take longer to get your cash. If you have one, though, it will be a much faster process. You will have to provide personal information, after which the bank will take the time to check your credit history and decide if you’re risky to lend to or not.
How Long for Loan Disbursal with a Personal Loan with Banks and Credit Unions?
The disbursal can happen between a few days and a few weeks, depending on whether there are issues or not. Since these services don’t have advanced technology, they can’t instantly check your credit, that’s why it takes longer.
3 Tips to Speed Up Your Loan Application Process
Make Sure You Meet the Lender’s Eligibility
One of the things you need to make sure of is, of course, meeting the lender’s eligibility criteria. Each lender is different and requires specific things from its applicants before it can approve a loan application and disburse money.
For instance, some lenders require you to have completed your studies before you apply for a loan, whereas others want you to have been employed for a specific amount of time. For this reason, you need to check out each lender you come across and see if you meet their requirements. As long as you do, you have no reason to worry about having to clarify anything, and the process will go by in a smoother manner.
Have All of Your Documents Ready Before You Start
This should go without saying, but you need to ensure you have all your documents ready way before you start your application. Typically, lenders list the documentation they need from you, so you have enough time to gather it before applying. If you have it, you won’t be contacted by the lender to bring additional documents.
Ask for Help If You Get Stuck
You may get stuck in the middle of the application process, and you will just have to wait while thinking of what to do next. Don’t be afraid to ask for help, though. This way, you will make sure you finish the application earlier and you have better chances of getting your loan quicker.
You may have come here wondering “How long does it take to get a personal loan?”, and now you should know the answer. Whether you need an UBER driver loan or any other type of personal loan, it will take a certain amount of time depending on the type of lender you borrow from. If you need to learn more about personal loans, you can do it here, and you can also check out Stilt if you need more loan information in general.
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