How Quickly Can You Get Personal Loan Money Into Your Bank Account?

If you want to borrow for a big purchase or a surprise expense, a personal loan is one option. A personal loan is often more affordable and has a more predictable repayment schedule than a credit card. For many people, it's easier to pay it back in a reasonable period.

You may be hesitant about getting a personal loan, though, if you don't understand how it works. After all, most people know how to swipe a credit card at the store, but figuring out how to get personal loan funds deposited into your bank account can be trickier. The good news is, it's doable for most borrowers. And more quickly than you'd think.

Here's what you need to know about getting personal loan funds into your bank account.

Do you qualify for a personal loan?

Before you think about how fast your money from a personal loan becomes available, you need to consider whether you'll be eligible for funds from a personal loan in the first place.

Some lenders, like LightStream, make it very clear that they cater only to borrowers with good or even great credit. Others, like Upstart, are open to lending to borrowers with credit scores as low as 300, provided they meet certain requirements about their income or bankruptcies and collections.

Now, you'll pay more for a personal loan if you have bad credit than if you have good credit. But, on the whole, the rates for personal loans generally tend to be lower than credit card interest rates, and most people can find a lender out there willing to work with them as long as they have a solid income.

And, many lenders allow for timely approval as well. You can often get an answer within minutes about whether or not you have been approved for a loan if you apply online.

How quickly does the lender provide funding?

Once you're approved for a personal loan, you still have to sign any required loan documents and wait for the lender to release your funding. Again, the good news is, this often happens pretty fast -- sometimes in as little as the same business day you applied.

Now, you need to be careful that you're paying a reasonable rate, as some lenders that offer same-day funding are actually payday loan lenders that could charge you a rate upwards of 400% APR. But if you know your rates and are comfortable with the terms, you can get your money faster than you'd think.

Since personal loans can be available to you soon after applying, you shouldn't hesitate to borrow this way if doing so makes sense for your situation. If you want a cheaper yet still flexible source of funding for a big purchase, you should consider whether a personal loan or credit card is a better choice.