QandAs: Loans

When I get a Personal Loan, does the Lender send me a check I can cash?

Answer:
Qualifying for a personal loan is difficult, and most

lenders have very strict requirements. However, if you qualify for the loan, you can usually receive funds within three to seven days. The way a lender handles the disbursement of funds varies. In most cases, lenders issue the borrower a check. If the personal loan is secured, the borrower can use the money for any purpose. This might include debt consolidation, home improvement, business start-up, vacation, etc. On the other hand, if the personal loan is unsecured, the lender may restrict the use of funds.

For example, if an applicant applies for an unsecured loan with the intent of starting a new business, the lender may require that the entire loan go toward the start-up costs. Sometimes, borrowers apply for an unsecured loan and use the money to pay off debts. Rather than give the borrower a check, the lender may disburse the funds to each individual lender. This process ensures that the money is used for the intended purpose. If funds are leftover, the lender will issue a check to the borrower. Before applying for any type of loan (secured or unsecured), check with the individual lender and inquire about their loan process.


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