Understanding loan types
There are two main types of loans you may be considering: personal loans and secured loans. Here's a quick overview of each:
- Personal loans: These are unsecured, meaning you don’t need to provide any collateral, such as a house or car, to the lender. As a result, they're often quicker to arrange.
- Secured loans: These require you to use an asset, like your home (for a homeowner loan) as security. They can take longer to process due to the extra checks involved.
Personal loan approval times
As a general rule, lenders take anywhere from a few hours to a week to check your application and let you know the outcome. This time depends on:
- The lender
- How quickly their internal processes are
- The accuracy of your information
- Whether you need to provide supporting documents
If approved, you should receive the funds within a few days, and in some instances, on the same day.
How long does a personal loan application take?
Filling out a personal loan application can be a quick process, especially if you apply online. It’s usually suggested to complete an eligibility check first, which can be done in a few minutes. This way, you can see how likely you are to be accepted, without affecting your credit rating.
After this, the application itself shouldn’t take much longer, but it depends on how readily available your information is. The lender may also require additional information from you, e.g. payslips, bank statements, and proof of your address; all of which can increase the time taken.
Remember, it’s important not to rush. Think carefully about what you can afford to borrow before you apply. Missing just one repayment can hurt your credit score and affect your chances of getting credit in the future.
Loans for all purposes from £1,000 to £500,000
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Intelligent Lending Ltd is a credit broker, working with a panel of lenders. Homeowner loans are secured against your home.
Secured loan approval times
Typically, it takes around three to four weeks from initial enquiry to receiving funds. Secured loans take longer than personal loans because there is extra work involved.
- Property valuation: Since the loan is secured against your property, the lender may need to organise a valuation before they can reach an agreement.
- Document checks: The lender may request further information about your employment history, financial stability, and other factors. Being prepared to provide this documentation can help keep things moving.
How long does a secured loan application take?
Again, it’s wise to complete an eligibility check before applying to avoid unnecessary hard checks on your credit report. This can usually be completed in a matter of minutes.
If you make an application, it will likely be done over the phone or in person with a trained specialist. They’ll go through the information you’ve provided in more detail, and complete an affordability assessment. This is where your income and outgoings will be checked to ensure you can comfortably afford the repayments. This stage usually takes around 45 minutes to an hour.
Because a secured loan uses your property as collateral, it comes with certain risks. If you’re unable to keep up with payments, the lender may claim your property. That’s why it’s recommended to speak to an adviser before agreeing to a secured loan. Always make sure you’re comfortable with the terms and that the repayments are affordable.
How to speed up the application process
No matter which type of loan you choose, here are some handy tips to help move the application along:
- Check the lender’s criteria: Make sure you meet the lender’s requirements before applying. This can save you time and protect your credit score.
- Make sure your credit report is accurate: View and fix any errors on your credit report. Conflicts between details on your application and your report can cause delays.
- Boost your credit score: A better score increases your chances of approval, which can speed up the process. Check out guides on how you can improve your credit score.
- Prepare your documentation: Gather all necessary documents in advance. This might include bank statements and payslips.
- Apply online: If possible, apply online. It’s usually quicker and more efficient than applying through the post.
By following these tips and knowing what to expect, you can make the loan process smoother and hopefully receive your funds sooner.
Disclaimer: We make every effort to ensure content is correct when published. Information on this website doesn't constitute financial advice, and we aren't responsible for the content of any external sites.
Zubin Kavarana
Personal Finance Writer
Zubin is a personal finance writer with an extensive background in the finance sector, working across management and operational roles. He applies his experience in customer communication to his writing, with the aim of simplifying content to help people better understand their finances.
