How long it takes to get approved for a line of credit depends on what kind of line of credit it is. For a regular credit card, often the individual will be approved in minutes. This is due to the fact that approval is based on an algorithm and inputs from the user. Home equity lines of credit, or HELOC, are usually approved within 2 - 6 weeks. A business line of credit can take anywhere between a few weeks to a few months. This is due to the fact that business lines of credit are often "collateralized," meaning the loan is given to the business with the business's assets used as collateral. Assigning the appropriate valuation to the assets and submitting proper documentation, such as tax returns, a balance sheet, and independent valuations of assets can take quite a bit of time. In general, collateralized loans have a much lower interest rate than non-collateralized loans.
How Long Does It Take To Get a Line of Credit Approved? FAQs
The approval process and timeline for a line of credit approval may vary depending on the lender, but typically takes anywhere from two days to one week.
In order to apply for a line of credit, you will typically need to provide information such as your income and expenses, employment history, personal financial records, and other documents.
Factors that may affect the approval process for a line of credit include your credit score, income, and debt-to-income ratio.
If you are denied a line of credit, it is important to understand why in order to take steps to improve your chances for approval in the future. You can reach out to the lender for more information and read up on how to improve your credit score.
Yes, most lenders will charge an application fee when you apply for a line of credit. Additionally, some may also require you to pay additional fees such as processing or annual fees. It is important to review the terms and conditions of your line of credit before signing any agreements.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.