Loans: How long will it take to get my loan

Once you've decided that you need to apply for a loan, many people want to get the loan as quickly as possible. But how long will it take? There are lots of factors that can affect how quickly a loan goes through. Before your loan application is accepted there will be some investigations and paperwork involved to determine whether the lender is prepared to loan money to you. Obviously the more paperwork involved, the longer the loan can take to complete.

Unsecured loans

Unsecured loans do not have any collateral tied up with them which usually means the whole process can be completed in a shorter period of time. In some cases it can be a matter of days but it can also take a few weeks if problems are encountered. The paperwork you complete will contain all the information they need to consider your application; your salary, employment history, any other outgoings or repayments, how long you have been in your current job and what length of time you have been at your current address.

This information will give the lender an idea of how reliable you are, whether you have the ability to repay the loan in full and on time or whether you are likely to default on your repayments or get into arrears. They will perform a credit history check with the information you supply them to see how good you have been with previous lenders. If your previous credit history is poor, otherwise known as adverse credit, you may not be able to get a loan with certain companies, but there are loan companies that do specialise in bad credit loans so don't give up.

In brief: On average an unsecured loan can generally be completed within 1 week.

Secured and homeowner loans

A secured or home loan entails a bit more work than an unsecured loan and therefore takes longer to complete. Because you are securing an asset against the money you are borrowing there is more paperwork involved. The main one will be a property valuation which will determine how much your home is worth. Deducting the balance of your mortgage from the house value will tell the lender how much money you can realistically borrow. By securing the loan with your house, you can get away with borrowing larger amounts of money for a longer period of time with a more favourable interest rate.

Despite securing the loan against your biggest asset, there will still be a credit check done to review your credit history. If you do default on your repayments your home will be repossessed by the lender to ensure they get their money back. A secured loan can be much riskier for the borrower than the lender, so do make sure you can afford your repayments before accepting a loan.

In brief: On average a secured loan can take 3-4 weeks from start to finish.

Short term loans

Short term 'emergency' type loans can be handed out very quickly. For example a Payday Loan can be in your bank account within 24 hours but needs to be paid back within 28 days, a bit like a credit or store card. Credit cards can take a few days in which to clear the paperwork and actually receive your card, but funds will be there for you to use within days and won't need to be repayed until the following month. However these short term fixes do have a downside, the interest rates on them are generally high so avoid using them for non-essential items and make sure they are repaid in full each month to avoid extra interest accumulating.

In brief: On average a payday loan will usually be completed within 24 hours.