Short Term Loans

How long does finance approval take in Australia?

Finance approval time of different loans

The loan approval process can vary depending on the type of loan you need. Let’s explore some of the most common loan options and their typical approval timelines:

• Personal loans: These are versatile loans you can take for unexpected expenses or debt consolidation. Some lenders, like Credit24, may respond to your application as quickly as 24 hours, but it may take between a few days to a few weeks for conventional lenders like banks.

• Line of credit: Approval times for lines of credit typically vary from just a few business days to up to 1-2 weeks depending on the lenders’ assessment of your creditworthiness and collateral requirements.

• Car loans: Automobile loans in Australia are usually approved within 1-2 business days on average as the car itself serves as collateral for the loan for secured loans. For unsecured loans, you may get approval within 24 hours based on your eligibility.

• Home loans: Due to the huge sum of money involved in buying a home, home loan approvals take time due to the complex process. You can expect a more thorough review of your finances, credit history, property details, etc. Approval can typically take up to 6 weeks.

• Business loans: Similar to home loans – business loans require a deeper dive into the financial health of your company. Approval times can range from several weeks to a few months depending on the complexity of the loan, the company’s financial history, and growth potential.
• Pay advance loans: These short-term, high-interest loans often come with a quick approval process, sometimes completed within an hour. However, be mindful of the steep repayment terms associated with pay advance loans.

Other factors impacting your loan approval time

While the type of loan plays an important role, several other factors can impact how quickly your application may be approved. Here’s a closer look at some of these factors:

Loan amount

The size of the loan can significantly impact approval speed. Smaller personal loans or lines of credit might receive quicker approval as they pose less risk to the lender. Larger loans such as home loans or business loans require more scrutiny—leading to a longer wait time.

Your credit history

Your credit score is a key indicator of your financial responsibility. A very good credit score (typically above 846) in Australia suggests a history of on-time payments and responsible borrowings.¹ This makes your loan approval more likely and potentially faster. However, a lower credit score might trigger a more cautious review by the lender, potentially extending the approval process.

Lenders’ evaluation process

Each lender has their own set of criteria and procedures for evaluating loan applications. Some lenders may have a more streamlined process, leading to quicker approvals. Others may be more thorough, requiring additional documentation or verification steps, which can take extra time.

Lenders’ policies

Every lender must have the required Australian Credit License to engage in credit lending activities.² The financial industry in Australia operates within a framework regulated by the National Consumer Credit Protection Act.

Some lenders may have additional sets of policies, loan guides, and financing conditions that can impact the level of documentation and verification required for certain loan types, increasing the processing time.

Seasonal fluctuations

Believe it or not, the time of the year can influence your loan approval speed. Certain seasons such as the holiday season or the start of the new fiscal year may see higher loan application volumes, which can lead to longer processing times.

How to speed up your loan approval time

Assessment speed depends on the loan type and the lender, but the following tips may help you save some time in the process:

1.    100% Online loans from lenders like from Credit24

For fast money requirements, lenders like Credit24 can be a blessing. Based on your eligibility, if approved within 24 hours for a personal loan of up to $10,000. The whole process is online, so the process is fast and you can get the money directly in your bank account.

2.    Know your credit score

Before you apply for a loan, check your credit report to take note of your credit score. Lenders look at this number in deciding whether they want to give you a loan. Knowing your score ahead of time can help you understand where you stand.

3.    Fix your credit report

If there are any mistakes or problems in your credit report, take steps to fix them. This could involve paying off debts or making sure your payment history is accurate. Cleaning up your credit can improve your chances of getting approved faster.

4.    Make sure your income can cover the loan

Lenders look at how much debt you already have compared to your income. So, make sure you have enough income to comfortably afford the new loan payments. Having a good spread between your debts and income can speed up your approval process.

5.    Don’t ask for more than you need

While it’s tempting to get the maximum loan amount, asking for less money that fits your needs can increase your chances of getting approved quickly.

6. Get a Guarantor

In some cases, having a person with good credit act as a guarantor can expedite the approval process, as they provide an additional guarantee of repayment. However, Credit24 does not offer loans that require a guarantor. Instead, you can use an asset as collateral. Securing your loan with collateral, such as a car or house, can often lead to faster approval. This provides the lender with something of value to claim if you fail to make payments.

8.    Know your needs

Having clarity about why you need the loan—whether it’s for a specific purchase or consolidating other debts—can help the lender understand your situation better.

In total, how long does it take to get a loan?

The complete loan process from application to settlement of a loan can vary depending on the complexity of the loan and the lender’s approval process. A home loan typically takes 4-6 weeks on average while a personal loan can get approved as early as within 24 hours.³ Typically, the loan process comprises three steps:

Application

The first step is filling out a loan application, which involves gathering and submitting the required documentation. You may need to submit personal financial statements like W-2s, tax returns, bank statements, pay slips, identification documents, etc. The lender reviews the application and documents to assess the borrower’s creditworthiness to determine the loan eligibility.

Approval

Once the application is submitted, the loan moves to the underwriting stage. The underwriter evaluates factors like the borrower’s credit score, income, assets, and collateral. If the loan is approved, you will receive the loan terms and conditions. At this point, any additional information needed will be requested by the lender before pre-closing the loan application.

Funding

The final step is the loan closing where you sign the paperwork if you agree to the loan terms. The funds are then generally disbursed to your account within two to five working days.

How long does a loan approval take with Credit24?

The approval time may vary based on the loan type and your creditworthiness. However, with Credit24, if you meet the eligibility criteria, the funds can be in your account within a minute of approval. Once you’ve completed the online application, you’ll receive a response regarding approval or rejection within 24 hours.

It only takes 10 minutes to apply—just answer a few questions and fill in the basic details to verify your identity and income. You can apply for a personal loan between $500 and $10,000 or a credit line

Learn more about Credit24

Disclaimer:
IPF Digital Australia Pty Ltd, trading as Credit24, ABN 59 130 894 405. Australian Credit Licence 422839. The information in this article is of general nature and does not take into consideration your objectives, financial situation or needs. Lending criteria, fees and charges apply. For more information about our products, eligibility criteria and terms and conditions, please visit www.credit24.com.au.

Sources:

• Equifax, Australians remain financially ambitious in the face of evolving economic conditions
• ASIC, Credit licensees
• Loans.com.au, How long does it take to get a home loan approval?