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.
How Long Does It Take To Get a Personal Loan?
The processing time for personal loans in the US can vary significantly depending on the lender and your individual circumstances. Here’s a breakdown of the common scenarios:
Online Lenders
- Fastest Option: Often the quickest, with many online lenders promising funding within 1-3 business days. Some even offer same-day funding.
- Factors: The approval process is often streamlined. They focus on your credit score, income, and information that can be verified online quickly.
Banks
- Slower, But Still Reasonable: Traditional banks often take a bit longer, typically within a week.
- Factors: Banks may have stricter qualification processes and involve more paperwork or in-person verification steps.
Credit Unions
- Comparable to Banks: Processing times at credit unions usually land around a week.
- Factors: Since they are member-owned, your existing relationship with the credit union could speed up the process.
Factors that Can Affect Processing Time Regardless of Lender Type:
- Completeness of application: Double-check your application for any missing details or errors that would cause delays.
- Your credit history: Borrowers with excellent credit may get approved and funded faster, while complex credit histories could require extra review.
- Time of application: Applying during a weekend or close to a holiday can add to the processing time.
- The amount you’re borrowing: Larger loans often need more extensive reviews, delaying the timeline.
Also Read: How Many Personal Loans Can You Have at Once?
how quickly can i get a personal loan
The quickest you can get a personal loan in the US is potentially the same day you apply. Here’s how to maximize your chances of speedy approval and funding:
1. Choose the Right Lender
- Online Lenders: Many online lenders specialize in fast processing and funding. Some reputable options include Upstart, LendingClub, and SoFi. Look for lenders who advertise same-day funding or next-day funding.
2. Have Excellent Credit
- Your credit score significantly impacts approval speed. Lenders tend to extend quick approvals to borrowers with excellent credit (720+) as they represent less risk.
3. Prequalify
- Many lenders offer prequalification with a soft credit check that doesn’t hurt your score. You can gauge your potential interest rates and loan terms beforehand, streamlining the process when you officially apply.
4. Prepare Your Documents
- Gather the following beforehand:
- Income verification (pay stubs, tax returns, etc.)
- Government-issued ID
- Proof of address
- Having these ready prevents delays while the lender verifies your information.
5. Apply Strategically
- Early in the week: Avoid applying on weekends or before holidays.
- Early in the day: This gives the lender more time to process your application within the same business day.
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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.
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Conclusion
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.
