How Long Does a Loan Take to Process?

When you need to borrow money, chances are you need it fast. Speed matters when you are looking for a loan. However, if you’re not careful, sometimes speed comes with a catch and lands you in a worse financial position than where you started.

Yet, being prepared and understanding the loan process can help you get the loan you need from a reputable lender in as little as a few days or even the same day you apply. Every lender operates differently, but there are some basic guidelines to follow so you move the loan process along efficiently.

In this Tower Loan article, we answer the question “How long does it take to get a loan?” and walk you through the steps involved to avoid loan processing delays.

Typical Loan Timeline – Step by Step

Regardless of the lender you choose, the first step in the loan process is to complete an application. Lenders accept loan applications online, in person, and over the phone. Once you submit your application, your lender will review your financial details and either approve or deny your loan.

The last step in the process is to receive your funding. With a personal loan, you have the freedom to spend that money as you wish, within reason, of course. However, your financial obligations begin from the point of receiving the funds, as you must adhere to the agreed-upon terms and payment schedule until the loan is paid in full.

Here are some additional details about the steps involved in applying for and receiving a personal loan.

Your Application

How hard is it to get a personal loan?

Fortunately, it’s easy, quick, and convenient when you work with a trusted lender like Tower Loan. Our application will likely take you only a few minutes to complete, and it will definitely be less than half an hour.

During this stage of the process, you’ll need to provide us with your personal information, including your name, address, social security number, proof of income, a government-issued ID, and a reason for borrowing money.

There may be the option to prequalify for a loan before you even officially apply. When you prequalify for a loan, a lender only conducts a soft pull on your credit, which does not affect your credit score. By taking advantage of a prequalification offer, you can see the estimated terms and rates before committing.

The Approval Process

How long does it take for loans to be approved?

At Tower Loan, we can often provide our customers with same-day funding. Many online lenders offer automated underwriting, which generates loan approvals almost instantly or within just one business day.

However, traditional banks and credit unions often still rely on manual underwriting, which can result in loan approval taking two to three business days or even longer. During the underwriting process, your lender may ask you to provide additional financial documents that you didn’t initially submit, such as tax returns, proof of employment, pay stubs, and W-2s.

Receiving Your Money

How long does it take to process a loan?

Receiving funding for your loan can happen as quickly as the same day you apply or take up to seven business days, depending on the lender. Online lenders often offer the quickest turnaround times with same-day or next-day funding. Meanwhile, banks and credit unions may take more like two to seven business days, depending on your established relationship with the lender and the processing and deposit methods they use.

Loan Speed by Lender Type

How long does it take to get a loan approved? As you are likely beginning to understand already, the answer to this question depends upon the type of lender you choose when you need to borrow money.

Here are the most common sources of personal loans and how they work to provide loans to their clients.

Online Lenders

Online lenders offer a quick and convenient way to borrow funds when you are facing an urgent situation. Their approval process typically takes only a few minutes, and funding can occur on the same day or the next business day. Digital platforms offer a convenient way to access cash quickly, eliminating the need to travel to a loan office or meet with a loan professional in person.

Traditional Banks

Banks typically take a more traditional approach to lending, which can be slower than that of online lenders in terms of approving and releasing funds. A bank’s approval process typically takes one to three days, and funding may require an additional three to five business days.

This lending speed could be expedited if you are an existing customer of the bank and already have an established relationship with open accounts. Banks are strict in their adherence to underwriting procedures and are known for requiring more financial documentation from prospective borrowers than online lenders.

Credit Unions

Another option for getting quick cash is a credit union. The lending speed of credit unions often falls somewhere in between that of an online lender and a traditional bank.

Credit unions usually take one to three business days to approve loan applications and then three to seven business days to fund a new loan. There is also the added hurdle of becoming a member of the credit union to be able to borrow from one. However, you may be rewarded with a lower interest rate on your loan and get more flexibility with your repayments if you have good credit.

Factors That Affect How Long It Takes to Get a Personal Loan

How long it takes to get approved for a loan and receive your money depends on various factors. First, the accuracy of your application has an impact on processing speed. If you skip over required fields, make typos, or have inconsistencies in the information you provide, these errors could slow down the processing.

If you have good credit, you’re more likely to receive a nearly instant approval. However, if your credit is weaker, a more thorough, manual review may be necessary. Additionally, larger loan requests may take longer to process due to the need for more extensive review and verification.

If you apply for a secured loan that’s backed by collateral, the review process may take longer because your lender will need to evaluate your assets. Once approved, bank processing times can result in delays before you can actually access your funds, as they may not appear in your account immediately.

Furthermore, it’s essential to be responsive to your lender’s requests and provide additional documentation promptly if you require quick access to funds.

How to Get Your Loan as Quickly as Possible 

Now that you understand the answer to “How long does it take to get a loan?”, what can you do to help speed up the process?

Fortunately, there are several steps you can take to ensure the loan process proceeds smoothly and avoid any hassles or headaches along the way. Before you even apply for an installment loan, check your credit score and review your credit reports. Being informed about your current credit situation will help you be better prepared for how lenders will respond to your application when they receive it later.

Reviewing these financial documents will also enable you to check your credit report for errors and dispute them, ensuring they don’t affect your chances of approval and the terms offered. Research prequalification opportunities to compare loan offers without harming your credit score unnecessarily.

Also, before you start your loan application, gather all the necessary documents you’ll need so you have everything easily accessible for your lender. This means compiling your proof of income, bank statements, tax returns, and personal identification documents.

If possible, apply for a loan online to expedite the process. You can save substantial time by submitting a digital application because you’ll save a drive to a loan office and may gain access to a lender’s automated processing system.

After completing your loan application, review all details carefully to ensure completeness and accuracy. Even the tiniest of mistakes can result in delays you could have avoided with a bit of proofreading.

“Fast” Loans to Avoid

Although obtaining a loan quickly is a primary goal for many applicants, you shouldn’t prioritize speed recklessly over everything else. Some fast loan offers may not be legitimate or come with unfavorable terms and rates putting you in a compromised financial position.

It might be tempting to gravitate toward loan options that promise instant guaranteed funding. However, these types of offers often come with serious risks and extremely high interest fees.

For instance, payday loans often have interest rates of at least 300% to 400%. Even if you manage your debt responsibly, it’s incredibly easy to fall into an endless cycle of debt when you are faced with interest rates that high.

It’s also risky to pursue car title loans because you take the chance of losing your vehicle if you’re unable to afford your loan payments on time. Without access to a vehicle, your life could become inconvenient or unmanageable, depending on your job and family situation. Another fast loan to avoid, if possible, is a pawnshop loan because these loans have high fees and put you at risk of losing your collateral if you default on your loan.

Fortunately, there are better alternatives available to most people when they need to borrow money. In addition to personal loans with flexible terms and reasonable rates, you can also look into credit-builder loans and “buy now, pay later” financing. When used carefully, these are safer options than payday loans or car title loans.

You can also get creative when you need quick cash and request a payday advance from your employer or sell items you no longer need for cash. Various online sites, such as Nextdoor, Facebook Marketplace, and Craigslist, offer opportunities to sell items from the convenience of your own home or a nearby location.

There are also numerous side gigs to explore for extra income, such as pet sitting, yard maintenance, house cleaning, and driving for a rideshare service. TaskRabbit and Rover are examples of online platforms where you can find side gig work in your local area.

We Can Help You Get a Fast, Legitimate, Affordable Loan 

Tower Loan has been in the consumer finance industry since 1936 and is a trusted local lender you can rely on when times get tough or you face an unexpected expense. We offer quick, simple, and convenient loan solutions, complete with an online application, to help expedite the review and funding processes.

We also offer fast and friendly service at our many physical offices throughout Alabama, Florida, Illinois, Louisiana, Mississippi, Missouri, Tennessee, and Texas. If you have questions about how personal loans work or need help completing your application, visiting a local office during business hours is often the fastest way to get the urgent funds you need.

So, how long does it take to get a personal loan from us? Well, the precise answer varies depending on your unique situation. However, rest assured that we will do everything in our power to get your application approved and the money in your hands as quickly as we can.

You can also manage your loan anytime, anywhere with the Tower Loan Mobile App—making it easy to apply, make payments, or check your balance right from your phone without ever needing to visit an office. If you’re ready to get quick cash for any reason, please stop by a local office near you or complete your application online today.