How long does it take to get a personal loan?

Personal loans can give you the money you need to complete home improvements, buy a new vehicle, pay off debt, and more. But if you're one of the 32% of adults who don't have enough to cover an unexpected or emergency expense, you might wonder how soon you can get money with a personal loan

The answer varies by lender and your personal situation, and factors such as your credit history, income, and type of employment can all play a role in how easily you get approved and, therefore, receive funding. Learn which lenders offer same-day personal loans, what to expect during the loan approval process, how long each step takes, and how you may be able to reduce your loan's approval time.

What is the personal loan application process?

The personal loan application process generally consists of these four steps:

1. Research lenders: Look for personal loan lenders with income requirements you can meet and the loan terms you're looking for. You can research lenders individually from their sites or compare them on most lender marketplaces at a glance.

2. Prequalify: Once you find a few lenders with eligibility requirements you can meet and attractive loan terms, prequalify. You can get prequalification quotes with most lenders either directly on their website or via a loan marketplace. This can give you a good idea of what your terms may look like if you're approved. This step is optional but recommended because it doesn't impact your credit score. However, not all lenders offer it, and prequalifying does not guarantee that an official application will be approved.

3. Compare quotes: Consider the APRs and terms each lender provides in its prequalification quotes, as well as monthly payments. Also, check out each lender's customer satisfaction scores on consumer rating platforms such as Trustpilot and the Better Business Bureau.

4. Apply: After you've compared lenders and chosen a loan, you must submit an official loan application. Your lender uses personal and financial information you provide - often including your Social Security number for a credit check and details about your employment and income - to determine your eligibility. At this stage, most lenders conduct a hard credit check, which could temporarily ding your score.

5. Review the loan offer and sign: After the lender approves your loan application, review and sign the documents to accept the terms. Typically, funds will be deposited into your account within a week, but many lenders offer same-day or next-day funding. If you opt for a check rather than an electronic transfer, it may take longer.

How long does each step of the approval process take?

The loan approval process generally consists of three steps: application, approval, and funding. However, each lender has its own process for verifying information and approving loans, so timeframes can vary.

Application

Time to expect: 15 minutes or less

Even if you prequalify for a personal loan with a lender, you'll still need to apply for the loan before you're approved. The application usually starts with your personal details like your name, Social Security number, address, and contact information. You'll also specify how much money you need to borrow and what you're going to use the loan for, as well as how long you need to repay the money.

You then need to provide details about your identity and finances, including information about your income and type of employment. You may be asked to supply documents to verify this information after applying.

Approval

Time to expect: As soon as same day, up to one week

Depending on your credit and application materials, some lenders may ask for supplemental documentation before approving your application. For example, lenders may require proof of address documents (such as a utility bill or lease agreement), proof of your identity (such as your driver's license), and/or proof of income (such as pay stubs or tax documents). If you're asked to provide supplemental documents after applying, this can extend how long it may take to get approved.

Applying generally requires a hard credit inquiry, which can have a small negative impact on your credit that's typically temporary. When processing your application, the lender verifies and reviews everything you've submitted and decides whether to approve your loan. This is known as underwriting.

Many online lenders, like Upstart, use automated underwriting, which compares your application with previous applications, offering an almost-immediate decision after you apply. Other lenders, such as brick-and-mortar banks, may use manual underwriting, which requires an in-depth review of your application. Manual underwriting may take up to five to seven business days to complete.

Funding

Time to expect: As soon as same day, up to one week

If your application is approved, your lender transfers funds to you, usually via direct deposit or another form of ACH transfer. Funding times can vary by lender and funding method.

Some lenders fund loans the same day if you apply and get approved before their daily cutoff times. For example, 82% of SoFi personal loans have been funded the same day when borrowers signed before 7 p.m. ET on a business day. However, some loans may not reach your account for up to a week, depending on the lender's usual funding times and how quickly your bank processes deposits.

Same-day personal loan lenders

While most personal loans are generally funded within three to five days of loan approval, many lenders offer next-day and even same-day funding if you apply before the lender's cutoff time.

What are the requirements for personal loans?

Lenders usually look at the following when you apply for a loan.

Credit score and history

Your credit score and history paint a picture of your overall finances for lenders. By looking at your payment history, number of inquiries, age of accounts, and other details about your borrowing habits, lenders can determine your creditworthiness and judge whether you will likely repay the loan. A long history of making on-time payments and using a small portion of the credit available to you, for example, can demonstrate that you're a responsible borrower.

Although minimum credit score requirements for personal loans vary, lenders prefer to see good to excellent credit. A FICO score of 670 to 739, defined as good credit, may help you qualify for a loan, while a score of 740 or higher, very good to exceptional credit, could give you access to the best rates and loan terms. However, some lenders, like Best Egg and Avant, offer bad-credit loans that may be approved the same day.

Income and employment history

Your income - both the amount you make and how you make it - can help lenders determine whether you earn enough money to reasonably afford the loan you request. A steady employment history, often considered to be at least two years' employment with no significant gaps, can also make you appear less risky to a lender.

Some lenders have minimum income requirements. Discover, for example, requires a minimum individual or household annual income of $25,000 to qualify for a personal loan. However, not all lenders disclose these requirements to the public, but you can learn whether you might be eligible by checking to see if you prequalify.

Credible's prequalification tool lets you check your potential personal loan rates with multiple lenders based on your credit history and income before you apply without affecting your credit score. Once you submit a formal application, your credit score may dip by a few points.

Debt-to-income ratio

Also known as DTI, a debt-to-income ratio compares the amount of debt you have to your income, giving lenders an idea of whether you have enough free cash to pay toward new debt. For example, if you earn $5,000 monthly and pay $1,500 toward a mortgage and credit card debt each month, your DTI is 30%. In other words, 30% of your cash is already tied up in repaying your debt.

You can use a DTI calculator, like the one below, to determine your debt-to-income ratio. To calculate your DTI, add all of your monthly debts together, including debt from student loans, mortgages, credit cards, and other loans. Then, input your gross monthly income.

Loan approval time by lender type

You can apply for a personal loan with an online lender, bank, or credit union. Different lender types can have different processing requirements and approval times. Here's how they compare.

Online lenders

Online lenders tend to offer the most efficient loan application and processing times, with some approving and funding loans the same day you apply if you submit an application a business day before the processing cut off. The speed of approval and funding from online lenders largely depends on how quickly and accurately you submit your application.

Even with delays, you can often expect an online lender to approve your loan within three business days.

Banks

Banks may have more stringent requirements, like requiring higher credit scores, than online lenders and often use manual underwriting, resulting in longer approval times of up to seven business days.

However, if you apply for a loan with a bank where you already have an account, you may be approved more quickly, especially if you've had credit or a loan with the bank in the past. Applying at an institution where you are already a customer may also help you qualify for better personal loan rates.

Credit unions

Loan approval times are similar between credit unions and banks. Like banks, credit unions may use manual underwriting, which can take up to seven business days to complete.

How to weigh approval times vs. other factors

While guidelines can help you know what to expect regarding loan approval times, there's no way to know exactly when your lender will approve your loan. In addition to varied lender approval processes, several factors can influence approval times, including:

• Your credit score: If you have imperfect or more limited credit, a lender might spend more time evaluating your application to determine your borrowing risk.
• Your income: Income from self-employment and other variable monthly sources may require additional time for a lender to review and verify. You may also be asked to provide additional documentation, such as two years' of previous tax returns, to support your application, which can delay the approval process.
• Loan amount: Approving a $20,000 loan is generally more risky for a lender than a $1,000 loan. In other words, you may need to wait longer for a large loan approval, depending on your DTI and credit profile.
• Technology issues: Online lending relies on technology for credit checks, underwriting, and document review. Technology hiccups at any point in the loan process may slow approval.

How to expedite the personal loan approval process

There's no way to guarantee a speedy personal loan approval, but you can try a few things to avoid unnecessary delays:

• Choose the right lender: Look for a lender known for its efficient approval process, such as those that use automated underwriting, accept applicants with lower credit scores, or advertise fast funding. LightStream and OneMain Financial are just two lenders that offer same-day personal loans.
• Apply online: Online applications tend to be faster to fill out, submit, and review than paper applications. Most lenders offer online applications, especially if they use automated underwriting.
• Prepare documents: Before applying, gather documents you might need to verify your personal and financial information, like your driver's license and pay stubs. Having this handy when you apply can save you time.
• Maintain your credit: Stay on top of your credit all the time, not just when you want to apply for a loan. Continuous monitoring can help you catch and fix errors quickly. Get a free credit report each year from AnnualCreditReport.com.

What types of fast loans should you avoid?

Some loans are considered emergency loans because they're generally easy to get with fast approval times. However, these often have significant drawbacks, like quick repayment times and high APRs and fees, that make them poor choices for many borrowers.

Payday loans

Payday loans pay you a portion of your paycheck before you receive it but typically require you to repay the loan by your next payday. Fees can be incredibly high on payday loans - sometimes as much as $30 per $100 - which make these very expensive compared to personal loans and far more difficult to pay off. You'll also have less cash on your next payday after paying your loan balance.

Credit card cash advances

A cash advance is a withdrawal you make from your credit card's limit, usually for a higher APR than the APR for regular purchases. Cash advances start accruing interest immediately, typically the same day they're issued. Some credit card companies charge cash advance fees of up to 5% of the amount you withdraw on top of this.

Title loans

A title loan is commonly a no-credit-check loan that requires your car as collateral. Because they're secured, title loans don't have strict requirements and can often be funded the same day you apply. However, they're usually high-interest, short-term loans you must repay within 30 days with monthly fees. These fees can be upwards of 25% of the amount you borrow. For example, if you borrow $1,000, you may pay $250 in fees.

Many borrowers roll over their title loans, or extend their repayment by another 30 days, in order to buy themselves more time, resulting in even more fees. You risk losing your car if you default on a title loan.

FAQ

How hard is it to get a personal loan?

Personal loan requirements vary by lender. Some require higher credit scores or incomes than others, which can make it difficult for many borrowers to qualify. The amount you need to borrow relative to your income, full credit history, and desired loan term can also impact your ability to get a loan.

What credit score is needed for a personal loan?

Minimum credit scores vary based on the lender. Most lenders prefer scores in at least the "good" credit range, which is a FICO score of 670 to 739, or better. However, some lenders, like Universal Credit, consider credit scores below 580.

How much of a personal loan can I borrow?

How much a lender lets you borrow depends on your credit, income, DTI, and the reason for the loan. Many personal loans max out at about $50,000, but some lenders, like LightStream and SoFi, offer personal loans up to $100,000, although these may be challenging for borrowers to qualify for without exceptional credit and a high income.

Some lenders allow bigger loans for certain uses like home improvements.

What is the difference between pre-approval and final approval?

Loan pre-approval shows you how much a lender may let you borrow and at what rate before you've officially applied. While this optional step can give you an idea of what to expect, a prequalification quote isn't final and doesn't guarantee loan approval. You must apply whether you've been pre-approved or not.

Pre-approval does not impact your credit, but submitting a formal application for a loan often does because it typically involves a hard credit check. This can drop your score slightly.

How to get a personal loan fast

You might be able to shorten the process of getting a personal loan by applying with a lender that uses online applications and automated underwriting. It also helps to organize your application documents ahead of time.

Ideally, choose a lender that disperses funds via ACH transfer, as that will speed up funding time. Also, maintain your credit by regularly checking your credit report and fixing errors as quickly as possible.