Due to the increase of online lenders, getting approved for a personal loan has become more streamlined than before. In fact, many digital-first lenders let you complete the entire process online, from the application all the way to the deposit of loan funds in your bank account.
But in some situations, you may need the funds as soon as possible. It can take anywhere from one to seven business days for your loan to be disbursed, depending on the lender. In some cases, it can be as soon as the next business day after approval.
- Funding timelines
- Online lenders
- Banks and credit unions
- Payday, pawnshop, and car title loans
- Requirements to apply for a personal loan
- How to qualify
Typical loan fund time
When deciding which type of lender you should choose, the amount of time that it takes to get your loan funded matters. If you choose the wrong lender and need money straight away, it may affect your financial situation.
The majority of lenders can be broken down into three groups and each takes a different amount of time to fund a personal loan:
- Online lenders: 1 to 5 business days
- Banks and credit unions: 1 to 7 business days
- Payday lenders, pawnshops, and car title loan agencies: Same day, with some exceptions
| Good to know: Payday and pawnshop loans should be generally avoided, as these loans typically come with higher interest rates and hidden fees in some cases. |
Online lenders
These lenders offer personal loans for varying uses that can be acquired entirely online, often with competitive interest rates and loan terms.
To get a personal loan through an online lender, you’ll need to fill out the lender’s application, which should only take a few minutes. After the application, you can prequalify in a few minutes and expect a formal approval in a couple of days.
Online lenders have one other major advantage over other types of lenders: their loans are funded quickly. While some lenders advertise that they can fund typical personal or emergency loans in as little as 24 hours, you can usually expect your loan funds in five business days or less. Your loan fund timeline will depend on factors like when you apply for your loan and your specific bank.
Overall, online lenders are a great option for people who don’t value in-person customer service.
See this table for different lender’s funding times:
| Lender | Time to fund |
|---|---|
| Achieve | Funds sent within 24 to 72 hours if approved |
| Avant | As soon as next business day (if approved by 4:30 p.m. CT on a weekday) |
| Axos Bank | Within 2 business days of final loan agreement |
| Best Egg | Half of customers receive their money the next business day. In most cases, as soon as 1 to 3 business days after verification |
| Discover Personal Loans | As soon as next business day after acceptance |
| Happy Money | 3 to 5 business days after verification |
| Lending Club | Typically takes a few business days |
| LendingPoint | As soon as next business day |
| LightStream | As soon as next business day (if approved by 2:30 p.m. EST) |
| OneMain Financial | As soon as the same day after approval |
| PenFed Credit Union | Depending on method, as early as the next day Direct Deposit: 1 to 2 business days Check: 5 to 7 business days |
| Prosper | 1 to 3 business days |
| SoFi | Within a few business days |
| Universal Credit | Within 1 day, once approved |
| Upgrade | Within 1 to 4 business days of clearing necessary verifications |
| Upstart | Funds are sent within 1 business day, but availability of funds depends on your financial institution. |
| Zable | The very same business day (if the request is approved before 3:30 p.m. ET on a business day) |
Banks and credit unions
Although their online counterparts sometimes overshadow their benefits, banks and credit unions are still a reliable option. They often fund personal loans in as little as 1 to 7 business days.
Plus, if you already have an established relationship with a local bank or credit union, you might be able to lock in better interest rates than you would through an online lender. There might even be loyalty discounts.
The application process for a credit union personal loan, or one through your bank, is going to be different from lender to lender, but often includes a meeting with a loan officer and filling out a physical or digital application. Regional or national banks might also offer the option to apply for a loan online.
You can expect to complete this process in as little as a day, but you should be prepared for it to take up to a couple of days to complete if necessary.
If you like your financial products to come with a personal touch, banks and credit unions are the way to go. While they may not offer the same speed or convenience as an online lender, working together face-to-face can build your confidence if you’re worried about affording your loan.
Check out this table for time to fund for different banks and credit unions:
| Bank | Time to fund |
|---|---|
| Citibank | – Same business day for a Citi account – Up to 2 business days for a non-Citi account – Receive a check in 5 business days |
| U.S. Bank | Within 1 to 4 business days after the loan closes |
| TD Bank | As little as 1 business day |
| Credit union | Time to fund |
|---|---|
| Alliant Credit Union | Typically same-day deposit |
| First Tech Federal Credit Union | If approved within 24 hours, funds are available the same business day. |
| Navy Federal Credit Union | Same business day in most cases |
Payday, pawnshop, and car title loans
Even if you need cash immediately, proceed cautiously with payday loans, pawn shop loans, and car title loans.
“These types of loans may look like easy solutions, but many people find themselves caught up in a never-ending cycle of taking out loans to repay the ones they already have,” says Anthony Martin, CEO of insurance agency Choice Mutual.
So, why do so many people fall for these predatory loans? They are funded immediately upon approval, often in cash, and have lax credit score requirements. In return for the quick cash, however, borrowers are expected to pay extremely high fees or put up a high-ticket item as collateral.
Payday loans, for example, have an average interest rate of around 400%, according to the Consumer Financial Protection Bureau. This equates to $15 in interest fees per $100 borrowed on a typical payday loan with a two-week term. If you fail to pay off your loan, this interest will compound significantly until you do.
What you need to apply for a personal loan
Before applying for a personal loan, prepare the documents and information required by your potential lender. This can help you avoid delays in getting access to the money you need. All lenders have different requirements, but most will require at least the following:
- Your driver’s license, state ID, or passport
- Your Social Security Number (SSN) or Individual Tax Identification Number (ITIN)
- Proof of income to prove you can afford monthly payments (such as pay stubs or tax returns)
- Proof of employment (such as an employment verification letter)
- Permission to run a credit check
- Your bank’s routing number and account information (to deposit your loan funds upon approval)
It’s always a good idea to prequalify. That allows you to shop around and compare rates and terms from multiple lenders before accepting an offer and without being subject to a hard credit inquiry. When you do, make sure that you also consider how much time each lender takes to fund their loans.
To get a sense of how a personal loan would fit into your budget, a personal loan calculator can estimate how much interest you’ll pay and what your monthly payment will be.
How to qualify for a personal loan
Each lender will have different eligibility requirements, but most require you to meet at least the following:
- Good to excellent credit: A credit score of 700 or higher is ideal for locking in the best personal loans and interest rates. Though bad credit personal loans do exist, they often come with higher interest rates and are more difficult to qualify for.
- Credit history: Lenders want to see that you have managed credit before and that you have done so responsibly. Like with a subpar credit score, a poor or thin credit history could be made up for by applying with a cosigner or co-borrower who agrees to assist in repaying the loan.
- Reliable income: A reliable income shows lenders that you can afford your minimum personal loan payment each month.
- Low debt-to-income ratio (DTI): Your DTI ratio measures how much debt you have compared to your income. If you have a high DTI ratio, lenders will often assume that you can’t afford to pay back your debts and that lending to you is too big of a risk.
- Collateral: Although not necessary for all personal loans, secured personal loans require you to put up collateral in case you can’t afford to pay back your loan. What qualifies as collateral will depend on your individual lender, but could include valuable assets like real estate, vehicles, collectibles, and financial accounts.