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Get a Debt Consolidation Loan

Debt consolidation is undeniably a famous financial tool used to manage multiple high interest debts. Using this strategy, you can turn all your other loans into a one more manageable loan with a comparatively lower interest rate. However, when you are trying to get your finances under control, you might wonder which banks offer debt consolidation loans and what the bank approval timelines look like including how long it would take to get the loan approved and funded. If you are looking for an answer, this is exactly where you need to be. 

Today, we’ll break down the whole personalized debt consolidation loan process for you including the expected timeline, key factors that matter and what possibly can you do to speed up the funding. 

How Long Do Banks Take To Approve And Fund A Debt Consolidation Loan?

If you want to apply for a debt consolidation loan from a traditional bank, you should know that the process can take anywhere between 5 to 12 business days. Moreover, you should review the document checklist to ensure quicker funding. However, the exact timeline depends a lot on your financial picture and your eligibility. 

Here’s a general breakdown of the main stages; 

The more eligible you are for the loan, the quicker you’ll have access to your funds.

Factors That Influence The Loan Approval And Funding Speed 

Banks usually take more time than online lenders and credit unions because their lending criteria is stricter. If you are in a rush to receive your loan funds then it’s best to try credit unions or other options such as debt relief programs because banks can be a little slower. Here’s a step by step guide that includes some major factors that can both speed up or slow down your loan approval and funding process; 

1-Your Financial History And Your Credit Score 

As said earlier, your financial history is of utmost importance when you are applying for a debt consolidation loan from a bank. Banks take this really seriously and what matters the most is your credit score as well. You can expect faster approvals if your credit score is above 670, if it’s lower than this then of course you’ll have to face some delays in the process. In case of a poor financial history, the bank may require you to provide additional documentation to verify your case and this again can extend the time duration of the process. 

2-Prepared Documentation

If you want to reduce the delays, it’s important that you have all the documents prepared before time. Some important ones that you require are; 

3-Online Lenders Vs Bank 

Traditional banks often take the longer route because of their stringent reviewing process. On the other hand, if you really are in dire need and can’t wait for a week or two then it’s best to opt for online lenders. They offer more flexible terms and they even deal with people with poor credit. 

4-The Amount Of Your Loan And Its Complexity 

If your debt consolidation loan request involves multiple lenders or if you require a large amount then the bank could extend the underwriting timeline because of the complexity of your case. Coordinating with third parties and other due diligence can take more time. 

5-Workload And Internal Bank Policies 

Sometimes, it’s not your loan or eligibility that’s delaying the approval process, in fact, when banks already have a long queue or high volumes of applications to deal with, it can take them longer to process your loan. 

6-Whether You Are Already An Existing Customer 

You should first check and apply with your own bank if you want to speed up things. Having a long standing and good relation with your bank means that the bank already has some of your financial information and they won’t take much longer to verify your loan in detail. 

Effective Tips To Speed Up Loan Approval And Funding 

If you want to speed up your loan process then here are some effective tips that can come in handy; 

1-Try Applying Online 

People prefer visiting banks in person when applying for a debt consolidation loan but what they don’t know is that banks prefer digital applications and they process them quicker than the ones submitted in person. If your bank offers a digital application, simply apply online and ensure that you’ve provided all of the important documents to make your case stronger. 

2-Gather Your Documents 

Your documents can make or break your loan application. Especially if you are in dire need to get your loan approved quickly then it’s important to gather all the required documents before time. This way you’ll be able to avoid the back and forth communication. 

3-Review Your Credit Report 

For banks, your credit report and your credit history both are two of the most important factors that they use to determine whether you are eligible for the loan or not. It’s best to first review your credit report and ensure that there aren’t any errors weighing down on your credit score. In case you find any misinformation or discrepancies, dispute them with the union immediately. 

4-Ask For A Pre-Approval

A formal loan application will hurt your credit score and in order to avoid it, it’s best if you ask the bank first for a pre-approval or a soft credit check. A soft credit check will help you determine whether you qualify for the loan or not and if you do, what possible terms would you receive. 

5-Follow Up Proactively 

After submitting the application, you should follow up with the bank’s representative to show that you really do need the loan to consolidate your debt. 

Faster Debt Consolidation Options 

If you are short on time and really need the loan for consolidation then it’s best to try other alternatives; 

Key Takeaway 

In a nutshell, with banks you’d need to wait for at least 5 to 15 business days to get your loan approved and funded. To speed up the process, you should have the documents prepared, your credit profile and financial history should be up to the mark and the timeline also depends on the bank’s internal processings. If you can’t wait to go through such a long process then it’s best to explore other options that can help you get access to your funds sooner. It’s important to set realistic expectations when applying for a debt consolidation loan from a bank so that you can make better decisions to improve your financial future. 

FAQs

Q1. Is It Possible To Get A Same Day Or Next Day Funding From A Bank?

It’s difficult to say because traditional banks do not offer same day or next day funding for consolidation loans. It’s rare and if you really want the loan immediately then opting for online lenders and credit unions is way better. 

Q2. What Can Cause Delay In The Loan Approval Process?

There are multiple factors that can slow down your loan approval process including; 

Q3. After Approval, How Would I Get My Funds From The Bank?

It mainly depends on your loan structure. Banks usually transfer the funds directly into your bank accounts but some do provide the option of distributing the funds into your creditor’s accounts. It usually takes 1 to 3 business days for banks to disburse your funds after the approval. 

Are you searching for quicker debt relief solutions? Try our streamlined process at Mountains Debt Relief to ensure a smooth and seamless debt-free journey. Contact Now!