Did you know that there are about as many people who have online loans as those who have traditional loans?
Everyone needs an emergency fund, but you never know when you are going to need more. Many people have been through unfortunate and unexpected events, and they have wiped their savings out. While you are waiting for your paycheck to hit, you need funds.
Now, borrowers and lenders have online loans. This means that you can get funding quicker than you think. While you wait for your payday, it is always a good idea to think about an online option. Keep reading to learn about how long it takes to get your loans going.
What Is an Online Loan?
You can get an online loan from a lender that only works online or from the online branch of a more traditional lender. These are personal loans that aren’t secured most of the time, but you can also get other kinds of loans online.
As with traditional lenders, each online lender has its own minimum requirements for who can get a loan and what credit score they need. You can usually find out if you are prequalified for a loan with a soft credit inquiry that doesn’t hurt your credit score.
To finish an application, you may have to agree to a hard credit check, which could hurt your score a little. You’ll also need to upload proof of who you are and how much money you make, like a copy of a government-issued ID and pay stubs or tax returns.
If you decide to take out a loan, the money can be put right into your bank account.
An online lender could be a good choice if you need money quickly. You can often apply online in just a few minutes, and depending on the lender, you might even hear back right away.
If you get the loan, the money will usually be in your account within five business days. Some lenders send money even faster.
Comparing Traditional Options
Before getting a personal loan, you should look at as many lenders as you can. You can find the right loan for you this way. Some lenders make this very easy.
If you already have a checking or savings account with a bank, you might want to get a loan from the same place.
Getting a personal loan from a bank usually takes between one and seven days, depending on the bank and whether or not you already have an account with them. Major financial institutions with whom you do business can sometimes be one of the quickest places to get a personal loan, and the money is often sent out the next business day.
Some banks let you apply online, while others make you go to a branch in person. Before deciding whether or not to give you a loan, the lender will look at your income and credit score, among other things.
If you already have a relationship with the bank, you might also be able to get lower interest rates.
Credit Unions
Because they are not-for-profit, credit unions often have lower interest rates than banks. Because of this, they might be a good choice for a personal loan.
Some credit unions have less strict requirements than other lenders, so it may be easier to get a personal loan from a credit union than from another lender.
A credit union can take anywhere from one to seven business days to pay out a personal loan, just like a bank. There are, however, some credit unions that move very quickly.
Time of Application
With many online lenders, it only takes a few minutes to ask for a loan. You give some basic information, like your Social Security number and how much money you make, and you get an estimate of your rate. If you decide to move forward, lenders will check the information you gave them and look at your application.
Approval Time
Most online lenders take a few days to decide whether or not to approve a loan request. For example, one company may say that the review process will take three to four days. Another will state on their website that it will take about five business days to do it.
When deciding whether or not to give you a loan, lenders look at your credit history and other things. This takes time.
Funding After Approval
When you get approved for a loan, the money is usually sent to your bank account. Again, this process may be drawn out over a few days to a week, depending on federal holidays, how quickly your bank moves to accept the funds into your account, and other factors.
Check with your bank to find out when you can spend that money or reinvest it in your business or project. Regardless, there’s a good chance you’ll have funds available by the end of the week.
Preparing to Borrow Online Loans
At the end of the day, online loans are a fast and easy way to get the funding you need. If you can’t wait for a traditional bank to get money over to you in time, you can often receive funding from an online institution within a few days.
If you’re interested in applying for an online loan, please contact us today. We would love to discuss which of our options might be best for you.
