How Long Does It Take to Get Approved for an Online Personal Loan?

One of the best loan types to consider if you want to borrow a sum of cash for an emergency or essential expense is an online personal loan. With its favorable rate of interest and fixed monthly payment, it’s safe to say that a personal loan is unlike any other loan types that can put you into a debt trap.

The only question that most borrowers often ask is how long does it take to get approved for a personal loan after you send your loan application to the lender. To answer that question, it’s a must that you check out this blog post below.

What is an Online Personal Loan?

An online personal loan is a form of financing commonly used to consolidate debts or pay for an important expense. It typically has a lower annual percentage rate than a credit card, and the amount you pay every month is fixed.

A borrower can take out a loan amount ranging from $1,000 to $50,000 if he/she gets approved for an online personal loan. The borrower can pay it for a span of 1 year to 5 years, depending on the loan contract agreed upon between him/her and the lender.

Bank, P2P Lender, and Online Lender: Differences of Approval Speed

People who need to take out a personal loan can go to a bank, peer-to-peer lender, or online lender for that purpose. These three types of lenders differ when it comes to the speed of approving a loan application. Here’s a comparison between the three.

Bank

Getting loan approval from a bank can take some time. For instance, after you submit your application for a personal loan, it can take several days or weeks to receive approval from the lender.

It’s because banks are strict when it comes to checking the qualifications of a borrower. Several documents need to be evaluated to ensure that the loan applicant has the capability to repay the loan.

Peer-to-Peer Lender

P2P lenders conduct their lending operations online. As such, you can expect that the process of getting approved is more streamlined than banks. Typically, receiving loan approval from a P2P lender can take just within the day of your application or a few business days.

You just need to visit a P2P lending website, upload the necessary documents, and then wait for approval. P2P lending networks utilize a software program to check your documents to see if you qualify for the loan.

Online Lending Company

Online lending companies are popular nowadays because they make loan applications and approvals as fast as possible. Like P2P lenders, online lending companies that offer personal loans may approve your application within the day you submit your loan application or the next business day/s.

The Speed of Receiving the Funds

After you get the approval for your loan application, it’s now time to receive the cash that you need. Here’s the difference between banks, P2P lenders, and online lending companies when it comes to the speed of providing your much-needed funds.

● Banks. Different banking institutions vary when it comes to the length of time in making your funds available. Some can provide you the cash right after approving your loan, while others can go as long as several days or weeks after the loan approval.
● P2P Lenders. You can get the funds of your personal loan from a peer-to-peer lender immediately within the day of your loan approval. But some P2P lenders deposit the cash in your account for a few business days after you get approved for the loan.
● Online lending companies. After your loan application gets a thumbs-up from an online lender, the loan amount you borrow will get deposited in your bank account immediately.

Tips When Applying for a Personal Loan

When applying for a personal loan, there are things you need to do to avoid any obstacle that may come in the way to speedy loan approval. Make sure to take note of these tips to accelerate your loan application process.

● Take a look at your credit score to ensure that you can qualify for the loan amount you want to borrow. Lenders will also approve your application right away if you have good to exceptional credit.
● Compare the interest rates offered by different lenders to pick the most suitable one for your financial situation.
● Prepare the necessary documents, such as recent bank statements, pay stubs, and personal identification.
● Always check the application form if there are any errors before sending it to the lender.

Takeaway

Do you want to apply for a loan with speedy approval? Consider taking out an online personal loan. Online lending companies can approve your loan application in one to three business days after submitting your application.

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