Instant Personal Loans: How Fast Can You Actually Get Funds? (2024)

With most personal loans, it takes two to five days to get your money after your application is approved. So-called "instant loans" can reduce that time, often getting you your money the same day you apply. However, a number of things can delay the process.

What Is an Instant Personal Loan?

An "instant" personal loan is a personal loan in which the lender immediately makes a decision on whether to approve the loan. These lenders aim to evaluate your application and send you your funds quickly, if not always instantly.

An instant personal loan works in the same way as a standard personal loan. You can apply online or in person. The lender will perform a credit check to decide if you qualify for the loan and determine what interest rate to offer you.

If you are approved for the loan and accept it, the lender will send you a lump sum of money. You must then pay this money back, generally in equal monthly installments over a set period, which is typically a few months to several years. You'll pay interest on the loan, and sometimes fees.

How Fast Can You Get and Use a Personal Loan?

Some lenders offer fast processing times for personal loans. They include (in alphabetical order) LightStream, Rocket Loans, and SoFi.

LightStream, for example, says same-day funding is available if your application is approved, you sign the loan agreement, and you complete the verification process by 2:30 p.m. Eastern time on a banking business day and schedule funding by 3 p.m.

However, while lenders may be able to process your loan application the same day you apply, other factors may slow down your receipt of the money.

For example, lenders will often send your money via Automated Clearing House (ACH) transfer. While this is potentially quicker than a wire transfer, it's not instant. You'll have to wait for your bank to accept the transfer and give you access to the funds. In some cases, that could take a few days.

Pros and Cons of Instant Personal Loans

As with any financial product, instant personal loans have pros and cons.

Pros Explained

• Fast funding. Funds from your instant personal loan can often be available within a day or so of applying for the loan, which may be helpful in an emergency.
• Cheaper than credit cards. The interest rates on instant personal loans are generally much lower than those on credit cards, which will save you money in the long term.
• Convenience. You can research and apply for a personal loan online, which is more convenient than visiting a bank branch.

Cons Explained

• May require good credit. Although many lenders say they can process your application within one working day, this generally applies to applicants with good credit. If you have only fair or poor credit, the lender will typically look into your application in more detail, which can slow the process, as well as lead to rejection.
• Smaller choice of lenders. Only a small number of lenders offer same-day turnaround times for loans, so your choice is limited. Fewer lenders can also mean less competition on rates and terms.

How to Get an Instant Personal Loan

The process of applying for an instant personal loan is largely the same as applying for a regular personal loan. You should first determine how much money you need. You can generally borrow $1,000 to $50,000, though higher amounts may be available if you have excellent credit.

Then, review your finances to make sure you can comfortably handle the monthly loan repayments. This personal loan calculator can help.

Next, compare lenders. You can use our review of the best fast personal loans to compare prices and terms.

Finally, you can apply online by filling out the lender's application form. Generally, the applications are straightforward and require personal information like your Social Security number and income, among other data.

How Do People Use Personal Loans?

In 2023, Investopedia commissioned a national survey of 962 U.S. adults who had taken out a personal loan to learn how they used their loan proceeds or might use a loan in the future. Debt consolidation was the most common reason people borrowed money, followed by home improvements, and other large expenditures.

Alternatives to Instant Personal Loans

If you need cash quickly, an instant personal loan is often a good option, since these loans generally have lower interest rates than alternative sources. However, if you don't want to use an instant personal loan or can't qualify, you can consider some other financing options. They include:

• Cash-advance apps. These apps, some of which promise instant or one-day funding, provide small short-term loans, typically in amounts under $500 or $1,000.
• Credit card cash advances. Many credit cards allow you to take a cash advance, using an ATM or other means. While this can be convenient in a pinch, bear in mind that cash advances often carry a higher interest rate than regular purchases and the interest clock starts ticking right away, with no grace period.
• Payday alternative loans. Traditional payday loans, offered online and by storefront lenders, can also provide money quickly, but they typically have such high interest rates that they're outlawed in some states. Many banks and credit unions now offer similar loans but with more reasonable interest rates, called Payday Alternative Loans (PALs).

The Bottom Line

Some personal loan lenders promise to process your application and make your funds available on the same day you apply. While your application may be approved instantly and the lender may release the funds quickly, you may still have to wait on your bank's normal processing times to access them.