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If you apply for a loan, you usually want to have the money in your own account as soon as possible. However, it can take some time from the application to the approval and payment. In this article you can read about how quickly loans are approved, what differences there can be and how you can help to speed up the approval process.

What factors play a role in the approval of a loan?

What factors play a role in the approval of a loan?

The approval and thus the speed at which a loan is paid out depends on several factors. The main ones are:

  • The amount of the loan
  • Required documents for approval
  • The processes for credit approval at the respective bank.

The loan amount

Before a loan is paid out, the bank must check whether the customer is able to repay it. After all, there is a certain risk of default on the part of the bank. Logically, the higher the loan amount, the higher the risk. For this reason, the amount of the loan plays a decisive role when it comes to the speed of approval. Small loans – usually up to a limit of 1,000 USD – 10,000 USD – are subject to a fully automated check at most providers. A computer queries the applicant’s current credit score in order to assess its creditworthiness. In addition, an electronic view of your own account often has to be approved. Based on the information obtained, the software calculates how high the risk of a loan default is. This process usually takes place within a few minutes. The approval of such small loans is usually very quick.

When it comes to a larger loan, the risk to the bank is also greater. At many banks, such loans are usually not granted automatically, but are carefully checked by employees. Depending on the amount of the loan, the clerk must first obtain approval for payment by the manager.

Required documents for approval

While in the case of small loans it is often sufficient to have an electronic view of the account and to query the applicant’s credit score, the banks are requesting more documents for checking larger amounts (a detailed article on this). These usually include:

  • The last three payslips.
  • Confirmation of permanent employment.
  • Account statements from the last 6-8 weeks.
  • Budget bill with all regular income and expenses.

These documents usually have to be sent to the bank by post or email and checked there by an employee. Since this manual check takes time and delays can also occur by post, it takes longer to approve.

The bank’s approval process

There are different providers on the credit market. Basically one can differentiate between:

  • branch banks
  • direct Banking
  • credit intermediaries

All of these companies sometimes have different credit approval processes. In times of digitalization, some branch banks have already expanded their online offer to apply for credit, but often a personal audition in the bank is still required. This is especially true when it comes to larger sums. This process is correspondingly time-consuming. In any case, you should take all the necessary documents with you to an appointment to apply for a loan in a branch bank in order to avoid further delays. In most cases, applying for a loan from your own bank can be quicker, since it already has an insight into your previous financial history.

Direct banks do not have their own branches and only offer their business online. Accordingly, the application process for a loan can be completed quickly on the Internet. When applying for an online loan, it is always necessary to identify the applicant in order to prevent money laundering. With modern providers, this can now also be done online using the video identification process. Small loans that are subject to an automatic approval process can therefore be paid out within a few hours. If the application is checked manually, it usually takes 1-2 bank working days for approval. If the video identification process is not offered, the post identification process must be used, which means that an additional few days can pass.

Credit intermediaries do not themselves decide on the approval of loans. As the name suggests, they only provide bank loans to customers. The fact that another party is involved in the process can also extend the time until the bank actually approves the loan. But not with the credit comparison from Capital Lender! With the free loan application, you only have to enter your details once and you can request your individual conditions directly from several banks. By entering your data online, this can also be immediately transmitted to the respective bank. The application route is so user-friendly that you can enter all important information. If you have forgotten something, you will be informed of this when you apply and you can correct it immediately. So there is nothing standing in the way of a quick, sometimes even immediate (keyword digital loan) loan payment.

How does a loan application work in general?

How does a loan application work in general?

Although the individual banks have different processes for approving installment loans, the process is roughly similar. For the bank, the top priority is to avoid default. Therefore, the details of the borrower are checked more closely, the higher the loan amount. Basically, this is done according to the following steps:

  1. Assessment of creditworthiness
    A person’s credit rating indicates how creditworthy someone is. In most cases, the banks conduct a Credit Bureau query. However, there are also other credit bureaus that can be used for the credit check. If the credit score is too bad, the application for a loan is immediately rejected.
  2. Audit of the budget bill
    Especially with large loan amounts, information about the regular income and expenses must be provided. This helps the bank to assess whether the applicant can really afford the loan installment. In order to substantiate the information provided, the bank statements of the last 6-8 weeks are usually requested. Thanks to modern technology, some banks do without it, provided that the applicant allows the bank an electronic view of their own checking account in online banking.
  3. Legitimation of the applicant
    In order to prevent money laundering and fraud, every applicant must identify himself for a personal loan. During a branch appointment, the identification is carried out by the bank employee. If the application is made online, the post or video identification process can be used, depending on the provider.
  4. Approval and payment
    If all checks have been successfully completed, the loan application can be approved and forwarded to the appropriate payment agent within the bank. As a rule, it takes 4-5 days before the money applied for ends up in your own account.

Tips on how to speed up the approval process

Tips on how to speed up the approval process

As a loan applicant, you are in principle “at the mercy” of the processes within the bank and can therefore have little influence on the processing time. However, you can make sure that there are no further unnecessary delays. The following tips will help:

  • Provide correct information
    In the case of online loan applications in particular, the data is entered by the applicant himself. It is important that they are all correct. If it is determined during the later check that incorrect information has been provided here, the bank may ask unnecessarily or the request may be rejected. Also read our tips on “what can you do if the loan is declined”
  • The right time to apply
    Only bank working days are counted for the duration of credit approvals. These are from Monday to Friday. Anyone who submits a loan application on Friday evening must expect that it can be processed on Monday morning at the earliest. The same applies to bank holidays or bank strikes.
  • Submit full documents
    If you submit a loan application and have to submit documents for it, these should be correct and complete from the start. The following also applies here: if documents are missing or incomplete, the bank will ask questions. This leads to unnecessary delays. If you make the application directly in a branch, the necessary documents should already be taken with you.


How quickly a loan is approved depends on several factors. Small loans or instant loans are usually approved very quickly; in the case of larger loan amounts (e.g. for a debt rescheduling loan), a more time-consuming check is logically required. If you already have a long-standing business relationship with your own house bank, a loan approval can also be granted very quickly here. Thanks to digitization, online and direct banks are also offering accelerated application procedures for loans.

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