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  • Available 24/7

When taking out a loan, you’d want to know how long it would take for your application to get processed beforehand. This helps you manage your finances better. However, lenders are usually not upfront with these details as oftentimes, processing time is dependent on the type of loan you’re applying for.

If you’re taking out a personal loan, it can take a few minutes to a number of weeks to get approved. This would depend on the type of lenders you’re referring to. Often, if the loan application is done online, it tends to get processed faster thanks to the use of algorithms in the loan processing. Credit unions and banks, however, are likely to take more time due to how they process loans manually.

Factors Affecting Loan Turnaround Time

A number of things can affect the length of time it would take to get your loan application approved. For instance, your preparedness can be a factor. If all the information you need are readily available for you, the application can get processed faster.

Your source of income can affect the loan processing as well. Self-employed borrowers will often have to wait longer. It is always more difficult to verify your income when you are self-employed as how much you are getting every month may vary significantly. You’ll also likely going to be required to supply other supporting documents too.

If your credit score is less than ideal, then lenders might take longer to get your application processed. The same is true if your credit history is short or barely existent. Lenders will have to review your credit record to decide whether you are worth the risk or not- and that takes time.

Turnaround Time Depending on Lender

If you are referring to a direct lender online, the loan can get approved either in a few minutes or a few days. They are generally the fastest in terms of loan processing and there are even lenders that can get them approved in just a few minutes.

Credit Unions and Banks

Expect them to get your loan approved in a few days up to a few weeks. They usually take longer because of the higher credit standards that banks and credit unions require from their borrowers. Unlike online lenders, they do not have the technology necessary to process applications faster through the use of algorithms. Often, they have to rely on staff to get loans underwritten, and sicne it is manual, this often takes more time.

Peer-to-Peer Lenders

Compared to online lenders, they take a bit longer to process and approve loans. However, some of them can get the process done in a few minutes, while others can take a few business days. Approval is usually faster when you have all the required documents on hand, so it helps to know what these are beforehand before you apply. 

 

How Will Your Same Day Loan Affect Your Credit Score?

Your credit score is an important determining factor if you will be granted a loan. Banks and lenders usually take a look at your credit history to gauge your creditworthiness. But how does a loan affect your score? Taking out a loan has positive and negative effects on your credit score.

Positive Effects

1. Establish a credit reputation

In the world of credit, having zero credit is just as bad as having no credit. If you take out a loan and pay religiously, you will create a good history. Missing out on payments has a negative effect since it will hurt your credit rating.

2. Consolidation of debt

If you have a high credit card outstanding balance, or multiple debts, taking out a debt consolidation loan can improve your credit score. It will also help you save some money due to lower interest rates.

Negative Effects

1. Accumulation of debt

Let’s say you already have a personal loan and then you decide to get a new payday loan, remember that this affects your debt-to-income ratio. If you accumulate debt, it will appear on your credit score and it will be harder for you to get another loan if you need one.

2. Credit report inquiry

Unless you applied for a loan from a lender that does not perform credit checks, remember that every time you take out a loan, the result will have an impact on your credit rating based on the results of your application. Avoid taking out multiple loans all at once because it can damage your credit score.

Frequently Asked Question

 

What is Personal Loan?

Why do we use it?

Where does it come from?

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What is Short Term Loan?

Why do we use it?

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Payment Method?

What actually make our lending company very much preferred is because with have the best and most flexible repayment plan. We provide our clients the freedom to choose and get the best repayment plan that will suit their needs and financial status. We make sure that our clients will be able to pay on time without any hassle at all.