When you’re in a financial bind, getting the money to cover any shortfall in your bank account becomes a driving thought. You might wonder how to get a fast personal loan. Though you could always attempt a payday or title loan to get fast money, they often come with high interest and fees. They can also lead to an exhausting cycle of payments that seem to never end.
Though getting a personal loan can take longer than one of these high-interest options, it’s worth it to get the financial help you need without destroying your good credit and bank account in the process.
Let’s talk about what it takes to get a personal loan faster, how you can help the process along, and what might show up as an obstacle to getting the money you need.
How Long Can It Take to Get a Personal Loan?
It depends on the company you go with, but getting a personal loan can take anywhere from less than a day to several weeks.
Many personal loan companies offer conditional approval within a matter of minutes, known as pre-approval or pre-qualification. This means you input the basic information about yourself and your financial situation, and the company decides immediately if you meet their parameters. They might check your credit score (a “soft hit” that doesn’t actually affect your score) and look at that number. If you’re over their threshold, then other factors come into play, such as your income.
Once you have that conditional approval, it’s time to provide the documentation needed for the company to verify that your information is actually correct. This is where time becomes a factor, as you’ll have to provide the documentation (which might take a while, if you don’t have it on hand) and the company has to review it. This process can take a few days or several weeks.
It’s important to keep in mind that approval for the loan doesn’t mean the funds are immediately distributed. You might get full approval and sign the paperwork, but not actually see those funds in your bank until days later.
Why It Might Take Longer to Get a Personal Loan
There are some things that can easily slow the process down and keep you from getting the money when you need it.
Entering incorrect information
Whatever you told the company during pre-approval has to match up with what you provide to them when they want to verify the information. If you said you make $80,000 but your tax records say you made only $60,000 last year, you’ll have to explain that discrepancy with further documentation.
An issue with your credit report
If your credit report shows something that could adversely affect your potential loan, some companies might reject you immediately. Others might give you an opportunity to explain things. For instance, if you filed for bankruptcy a few years ago, you might have to write a letter explaining the circumstances around that bankruptcy and how your financial life has changed now.
In short, you might have to explain why they can trust you.
Applying in person
Though applying for a loan in person might feel more comfortable and you might think you have better odds of getting it, applying in person takes more time than applying online.
Applying in person means setting an appointment, going to the loan office, and taking the time to go through the process with a person who might not be in as much of a hurry as you are.
It might also take more time for even pre-approval to happen. There’s a caveat to this, however: If there might be adverse information on your credit report (as mentioned above), being in person might help as you can explain the situation immediately to a real person who can make an independent decision.)
Bank processing time
Not only does the timing of your loan depend upon when the money is actually issued, but it also depends upon how quickly your bank processes the funds. Some banks put a hold on anything over a certain amount, to take their time with internal controls to ensure there’s no fraud.
So even if the personal loan company sends you the funds today, it might take another week or two before the bank actually releases those funds to your account.
How You Can Help Move the Process Along
There are some things you can do to get a personal loan faster, or at least to prevent any slowdowns in the process. Having all of your ducks in a row, so to speak, can give you the peace of mind that you’re doing all you can to keep the process moving. Here are a few things to keep in mind:
Be honest in the pre-approval process
By providing honest information in this early stage of the process, you avoid being asked for more and more paperwork, a process that can take a good while.
Have all paperwork on hand before you apply
The loan company might ask for tax returns, bank statements, credit card statements, proof of immediate income (such as pay stubs), rental agreement or mortgage papers, and many other things. Have all of this on hand even if you’re not sure what you might need; it’s best to be fully prepared.
Keep up with your credit report
The government mandates that every person can get a free copy of their credit report each year. In fact, you can get a free report from each of the three credit reporting agencies, so technically, you can get three reports throughout the year. Go to AnnualCreditReport.com and follow the instructions. Check your reports to ensure there are no mistakes. If there are, fix them immediately through the instructions provided with the report.
Only ask for what you actually need
It can be tempting to ask for a personal loan up to the amount you can afford to make in monthly payments. But when the personal loan company sees that you only need $30,000 to consolidate that credit card debt yet you’re asking for $45,000, that might raise some eyebrows. Use a loan calculator to determine how much you need and what payments you can afford, and only apply for what you need to help ensure a smoother process.
Be prepared to explain any issues
If you have issues on your credit report or with your income, such as a long gap in your personal revenue stream, be prepared to explain the circumstances. Many issues, such as bankruptcy, can be easily overcome in a personal loan application simply by being honest and up-front about the situation.
Apply online
Even if you are working with a local bank or credit union, look for an option to start the process online. This can help avoid the extra time it will take to set an appointment and get to the brick-and-mortar bank, and you can start the online process at your convenience – even in the middle of the night.
Getting a personal loan fast can be top of mind when you’re worried about your finances, but patience pays off: You can find a much better deal with a personal loan than with a title loan or payday loan. Take a bit of time to get your paperwork in order in order to get your personal loan faster.
