How long does it take to get a personal loan?

When you need to borrow money soon, knowing how long the loan process takes from start to finish can help you manage your expenses. While each application is different, the type of lender you borrow from tends to affect your turnaround time more than anything else. Overall, the typical turnaround time is around 1 to 3 business days for online lenders, 1 to 2 weeks for peer-to-peer lenders, and 1 to 4 weeks for banks and credit unions.

Below is a breakdown of typical turnaround times for the pre-approval, approval and funding stages.

Type of lender	Pre-approval	Approval	Funding	Total turnaround time
Online lender	A few minutes	30 minutes to 2 business days	24 hours	Around 1 to 3 business days	Compare personal loans
Peer-to-peer lender	Not applicable	A few minutes to 24 hours	A few business days	Around 1 to 2 weeks	Learn more about peer-to-peer loans
Bank or credit union	1 to 5 business days	A few business days to a few weeks	1 business day to a few business days	Around 1 to 4 weeks	Learn more about bank personal loans or credit union personal loans

How long does it take to get pre-approved for a personal loan?

During this stage, the lender reviews your finances on a high level and gives pre-approval based on what it sees so far. Pre-approval does not mean you’re guaranteed the loan. Getting pre-approved for a personal can take anywhere from a few minutes to a few business days, depending on the type of lender.

Online direct lenders

Typically get pre-approved in: A few minutes.

Online direct lenders are generally the fastest option to get a loan. Filling out the application takes around 5 to 10 minutes, and once you submit it, you can receive a pre-approval decision within minutes. Online direct lenders are able to do this because they use software to scan your financial information. Compare personal loans from online lenders.

Peer-to-peer lenders

Typically get pre-approved in: Not applicable.

There are very few peer-to-peer lenders in Canada, and pre-approval may not apply. With GoPeer, Canada’s first regulated P2P consumer lending platform, you create an account, fill out a simple application and provide your consent at the end to go through a hard credit check. GoPeer will then review your application to give approval.

Banks and credit unions

Typically get pre-approved in: 1 to 5 business days.

One of the drawbacks of borrowing from a bank or a credit union is that the process to get a personal loan can take much longer. Banks often have stricter eligibility requirements than online lenders and might take more time reviewing your application to make sure you meet their criteria.

How long does it take to get officially approved for a personal loan?

The approval stage takes longer because lenders are going through your financial information in more detail to see if they can give you official approval. Getting approved for a personal loan can take anywhere from a few minutes to a few weeks, depending on the lender.

Online direct lenders

Typically get approved in: Around 30 minutes to 1 to 2 business days

Online direct lenders typically advertise quick approval and funding as a benefit to applying with them. Loan Away, for example, says it can give approval within 20 to 30 minutes, while Mogo aims to review and approve your application within hours. Compare personal loans from online lenders.

Peer-to-peer lenders

Typically get approved in: A few minutes to 1 business day.

GoPeer says it can give you an instant decision if all your information is accurate. If it requires more information, approval can take up to 1 business day.

Banks and credit unions

Typically get approved in: A few business days to a few weeks.

Traditional financial institutions like banks and credit unions rely on staff to underwrite their loans, and since they have stricter eligibility criteria for loans, approval can take longer, from a few business days to a few weeks.

Finder survey: Are men or women more likely to rate speed of approval as an important factor when applying for a personal loan?

How long does it take to receive funds?

Funds can be received anywhere from the same day to a few days, depending on your lender.

Online direct lenders

Typically get your money in: 24 hours

Once you’re approved, the lender transfers your funds directly into your bank account. Typically, this kind of transfer takes less than 24 hours. Compare personal loans from online lenders.

Peer-to-peer lenders

Typically get your money in: A few business days

Since peer-to-peer loans rely on individual investors for funding, getting your money can take a little more time. According to GoPeer, it can take a few days for funds to get transferred to your account.

Banks and credit unions

Typically get your money in: 1 business day to a few business days

If you already have an account with the bank or credit union, you might be able to get your funds much faster than if you choose a different bank to get a loan from. This is because your bank will be familiar with your financial situation and won’t have to transfer the loan to a different bank account, which can take some time. You may even be able to get your money as soon as the next business day.

What affects the turnaround time on a personal loan?

Aside from the type of lender you apply with, how long it takes to complete the personal loan process will depend on your:

• Preparedness. The more information you have readily available to you, the faster the application process typically takes.
• Source of income. Some lenders might take longer to process your application if you’re self-employed, since it can be more difficult to verify your income.
• Personal credit. Lenders might ask for more information or documents if your credit score is less-than-perfect or you have a short credit history.
• Collateral. If the personal loan involves collateral (a secured loan), the process will take longer whether you go with an online lender or bank because the lender needs time to evaluate the value of your assets.

5 tips to speed up the application process

1. Check the eligibility criteria. Applying for a personal loan you don’t qualify for means you’ll not only waste time, but you may also damage your credit score if lenders that you apply to do a hard credit check.
2. Gather your documents. Find out what documents your lender typically requires and gather them before starting the application.
3. Have your information on hand. Having the exact numbers on hand for your salary and monthly debt payments can cut down on the time it takes to fill out the application.
4. Ask questions. If you’re unsure of any part of the application, asking a customer service representative can ensure you don’t make mistakes that could slow down your application. Some lenders even have a live-chat feature.
5. Consider using a broker if you have bad credit. Borrowers with bad credit might have a harder time finding a personal loan they’re eligible for. Some online brokers like Loans Canada and LoanConnect can help you get pre-approved with multiple lenders even if you have a credit score under 560.

Compare personal loans

Bottom line

From start to finish, it can take anywhere from 1 business day to a few weeks to get a personal loan. Online lenders are generally the fastest.

Keep in mind funding speed should not be the only factor to consider when getting a personal loan – you’ll want to consider interest rates, fees, loan terms and the reputation of the lender. To learn more about how personal loans work and to compare lenders, check out our comprehensive personal loans guide here.

Frequently asked questions

• What credit score do I need for a personal loan?

  While most lenders require good or excellent credit to get a personal loan, it’s possible to find lenders willing to work with borrowers with credit scores lower than 660.

• How long do personal loans last?

  It depends on your lender, but most offer personal loans with terms anywhere from 6 months to 5 years, sometimes shorter or longer. The longer you take to pay off your loan, the less you pay each month but the more you pay in interest in the long run – which makes your loan more expensive.

• How much can I borrow with a personal loan?

  It depends on the lender and your financial situation. Lenders can offer as much as $50,000, sometimes more.