In the aftermath of the pandemic hardship, Americans covered $199 billion in personal loans in 2022. It was a 31% increase in the percentage compared to the previous year. But how long does it take to get a personal loan?
Taking personal loans is the standard practice in America. Personal loans have increased by 12% from 23.9 million to 27 million in 2022. In 2019, it was 23.3 million at the year’s end, dropping to 21.2 million in 2020. It took a back seat and grew up with a colossal leap, up to 28.2 million in 2021, and continued to grow as the pandemic hit the financial condition of America. Use Beem and fill out a simple form to check the best personal loan offers from the top providers in seconds.
In this blog, let’s explore the meaning of a personal loan, when you need it, how you apply for it, and how long it takes to get it.
What is a Personal Loan?
A personal loan is a debt an individual can take from a bank or financial institution for personal use, unlike loans specifically designed to buy a house or car among other purposes. You do not need to put up assets as a guarantee (mortgage) to get a personal loan because they are usually unsecured.
With personal loans, borrowers get a lump sum amount of money which can be for a wide range of various purposes, such as:
- Home improvements: Personal loans can fund renovations, repairs, or upgrades to a home.
- Medical expenses: Personal loans can help cover medical bills, surgeries, or other healthcare costs not fully covered by insurance.
- Education: Personal loans can finance educational expenses, such as tuition fees, textbooks, or living expenses while studying.
- Wedding expenses: Personal loans can be used to cover the costs associated with weddings, including venue bookings, catering, or travel expenses.
- Vacation or travel: Personal loans can fund travel expenses, allowing individuals to take breaks or travel for personal reasons.
- Emergencies: Personal loans can address unexpected financial crises, such as car repairs, home repairs, or medical emergencies.
When obtaining a personal loan, borrowers typically agree to repay the loan amount and interest over a fixed period. The interest rates and repayment terms can differ based on the borrower’s credit history, income, loan amount, and the lender’s policies.
How to Apply for a Personal Loan?
- Determine your loan requirements: Evaluate your financial needs to confirm the amount of money you need to borrow. Consider factors such as the amount, the purpose of the borrowing, and the repayment terms you are comfortable with.
- Check your credit score: It plays a crucial role in determining your interest rate and the eligibility you may qualify for. Please obtain a copy of your credit score and check it for errors or discrepancies. If you have any faults or a low score, work on them before applying for the loan.
- Research and compare lenders: Explore different lenders and find the best option for your needs. Consider factors such as Interest rates, terms, fees, eligibility criteria, and customer reviews.
- Collect necessary documents: Lenders typically require certain documents to process your loan application. These may include proof of identification, proof of income, bank statements, and proof of residence.
- Complete the application: Reach out to the Landers website or in person to start the process; you must provide personal information, financial details, etc. Please fill out the application without errors; otherwise, it will delay your procedure.
- Apply and wait for approval: After completing, apply for review. Many lenders allow online applications to make it convenient. Please wait for the study; they can ask you for additional documents.
- Review the terms and sign the agreement: Once approved, carefully review the terms; ensure that you understand and agree to all the given terms before proceeding. If satisfied, please sign the loan term. It can be done electronically for online lenders or in person for traditional banks.
- Receive the funds: After signing the agreement, the amount will be transferred to your bank account in a maximum of 5 days.
How Long Does It Take To Get a Personal Loan?
Usually, it depends on the type of lender you are working with. It can take 2-5 days to transfer your funding electronically to your bank account. Some common types of lenders include:
- The time of approval is one to three business days.
- Funding time can be two or more business days.
Some lenders can transfer money on the same business day if your credit score is excellent.
- The time of approval is one to three days.
- Funding time can be three or more business days.
Some local or regional funding units are available that offer personal loans. But the most common source is credit unions.
- The time of approval can be one to three business days.
- Funding time can be three to more business days.
Generally, banks take more time to process the loan agreement and ask for better credit scores than other institutions, which makes it more hustle worthy for borrowers. Still, they may have access to better interest rates, especially if you already hold a savings or current account in that bank.
How to Better Your Chances of Getting a Personal Loan?
- Clean up your credit: Your credit score can be considered a factor in your chances of getting a personal loan; the better the score better the chances of getting a loan. Common errors like incorrect accounts, closed accounts, and credit limits can create a hurdle to your credit score.
- Balance your debts and income: The application consists of your income statement. If it’s low, increase it by adding some side hustle to your working pattern. Lowering your debt compared to your income can increase your debt-to-income ratio, leading to a better chance of getting a personal loan on time.
- Only ask for an accurate amount of cash: Do request for the only amount you need to conduct your goals. More than that will create a burden to satisfy your other financial obligations.
- Consider a co-signer: A co-signer with a sound or excellent credit score can be assigned when you don’t have a good credit score, increasing the chances of approval because they can be equally responsible for repaying the loan.
- Contact the correct lender: Explore different lenders to find the best personal loan options for your needs. It is important to take factors like interest rates, loan terms, fees, eligibility criteria, and customer reviews into consideration. Online marketplaces and financial institutions’ websites can provide helpful information for comparison.
So, how long does it take to get a personal loan? Getting a personal loan can be difficult sometimes if you don’t have an excellent or sound credit score can be easy if you reconstruct your credit score. Beem will simplify the process of getting a personal loan for your needs from the best offers by top lenders. Understanding that these timelines are approximate and can vary based on individual circumstances and the specific lender’s processes is essential. Additionally, some lenders may offer expedited services or same-day funding for an additional fee.