Updated: Dec 2, 2020
For most users, extracting a .RAR archive is a pretty trivial process, but sometimes you'll notice some long wait times even for small archives... or worse, you'll get "disk is full" errors midway through the extraction process. Here's a quick rundown as to why.
First, drag and drop.
If you're prone to opening up an archive, and dragging the file or whole folder you want extracted over to another open window (or even the desktop), that's the most intuitive way to do it... but also the slowest and most performance taxing in many cases. The reason why is because this method, even if you're dragging the file to a folder on the same drive as the archive is already on, uses the system clipboard... meaning the entire contents of the files you're extracting will be cached on the C:\ drive before ultimately copying over to the target location. So if you have a huge, say, 100GB archive, your C:\ drive will have to have at least 100GB of free disk space or the job will fail. It's not clever by streaming clipboard contents over to the target drive as it processes live, it needs to cache all the data before it commits to the copy. That means in total, you'll need 100GB on C:\ and 100GB on your target drive for a successful extraction.
In some cases this might actually speed up performance (like if you've got an archive slow mechanical external HDD and want to copy it to the same drive, and your C:\ drive is an SSD, you'll be able to use the full read performance of the slow HDD to write to the clipboard on C:\, and then use the full write speed of the same drive when the clipboard empties into the HDD. This is explained more in-depth below, but be aware this is one of the few times that caching the data to the clipboard first may actually provide a faster extraction time when you're talking about extracting a huge archive. Otherwise, this is not a preferred method).
That's the (right-click archive>'extract here' or 'extract to (folder with the same name of the archive) procedure in WinRAR. Most scenarios will involve this, but be aware of the fact that when you're reading and writing simultaneously to the same mechanical drive, you only have so many physical heads that can seek, read and write. So if your external HDD (mechanical) claims it can achieve 100MB/s read and 90MB/s write, that's under ideal conditions where you are ONLY reading or ONLY writing at the time. Those numbers will be reduced greatly when reading and writing at the same time, like to about 10-15% of the full performance of the drive, because it has to constantly take turns seeking a file to read, cache, then seeking the location it's writing to, write, then seek back to the read area. This can lead to extreme wait times when extracting a large archive- longer than it may take to just download the file from the internet to begin with. And when you have local hardware data copying performance lagging behind your internet download speeds, that's an issue we shouldn't be living with in the modern day. But of course, until SSD's become affordable enough at high capacities to displace HDD's, it's something we have to keep in mind for a bit.
A way around this, aside from the third paragraph above regarding using the clipboard on an SSD-based C:\ drive, you could do a similar, although more manual procedure in case your C:\ drive doesn't have the capacity available to cache the entire file contents. So, if you have a secondary SSD somewhere, say as a D:\ drive or even an external SSD (but not a thumbdrive or SD card, you'll likely not reach high enough write/read speeds to notice any speed up for your extraction with one of those), and it must be run over at least USB 3.0 (or eSATA if you have one of those quirky interfaces), as USB 2.0's protocol tops out at 60MB/s (480Mb/s) which is really what most HDD's perform at anyway. By copying files like this (procedure is to right-click an archive in Explorer, click 'extract archive...' and choose your SSD target that isn't C:\). Let the extraction start, and enjoy nice, optimal speeds. The manual final step though is you'll need to go back to that file on your SSD after it's copied, and copy it back over to the HDD. But in this case at least you'll have a working file available instead of waiting for many, many hours for the file to be created ultimately.
Here's a comparison video of all 3 techniques on a 250GB archive. Be sure to check out the ETA's in the WinRAR window for each technique as well.