How long does it take to buy a car and how long does finance approval take? Car loan approval times vary depending on which type of lender you get financing from. You can speed up the application and approval process by selecting a lender that offers car loan instant approval or same-day approval. Find out which lenders offer the fastest car loan approval times and apply today to get auto financing.
It can take as little as a few minutes and as long as a few days to get approved for a car loan from start to finish. Your car loan approval time will vary based on a number of factors. These can include the type of lender you choose, the amount you need to borrow and your creditworthiness.
Yes. Pre-approval tells you how much you can borrow and at what interest rates, but it doesn’t give you access to funding. Instead, it lets you shop around for vehicles with a set price in mind. Once you find a car, you can then go through an expedited process to get financing from your lender by submitting an application for full approval.
Here’s an idea of approximately how long you can expect each step in the application and approval process to take:
Car loan pre-approval usually takes the same amount of time as it takes to get full approval and the application process can be less intense. Getting pre-approved in advance allows you to lock in your rates with a lender before you commit to a loan.
This gives you the freedom to shop around for a vehicle knowing exactly how much you’re eligible to borrow and at what interest rates.
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There are four main types of lenders: online lenders, banks, credit unions and dealerships. Each type of lender will have a different car loan approval time.
The information below is an assessment of car loan approval times for each type of lender:
| Type of lender | Car loan approval time |
|---|---|
| Online lenders | One business day to a week |
| Banks and credit unions | One business day to a few weeks |
| Dealerships | The same day to a few business days |
Online lenders tend to have a relatively quick car loan approval time for pre-approvals. If you apply during business hours, you may see a response on the same day or within a few hours. However, your lender won’t be able to fully approve your loan without first receiving documentation showing your proof of income, employment and citizenship.
This could take a few days to process, and it may take one to three business days for your funds to actually show up in your account. From start to finish, it can take up to a week to receive a car loan from an online lender.
The car loan approval time you’ll get with banks and credit unions varies based on the institution. Some have quick online applications with a similar car loan approval time to online lenders. Others follow more traditional car loan approvals and require you to visit a branch, fill out forms and wait for days to get your money.
Since your car loan approval time will vary based on your provider, make sure to speak to the lender you choose directly to see how long it might take to process your application.
How long does it take a dealership to find financing? Your car loan approval time for dealership financing can be as fast as the same day, but it comes with a caveat: The loan you walk out the door with may not be fully approved. Spot delivery, also called spot financing, is when your dealer allows you to drive off the lot before the financing is in place for your car.
If you don’t have good to excellent credit and a strong income, but have taken advantage of spot delivery, you might have to renegotiate your loan — usually for a less optimal rate — or else return your car.
This is commonly referred to as “yo-yo financing” because the dealer promises you one monthly payment or interest rate, then raises the rate if an agreeable lender can’t be found (which happens frequently).
Make sure your purchase agreement doesn’t say that your loan is “subject to approval.” If so, you may experience unexpected delays and the car loan instant approval time you were promised may not work out.
If you have bad credit and need a car loan as soon as possible, you may be able to get the fastest turnaround with online lenders. It might not be possible to get instant car loan approval for bad credit, but many online lenders aim for pre-approval within minutes and you may even be able to get full approval within 24 to 72 hours.
Just be aware that you should watch out for online providers that advertise instant car loan approval for bad credit since it could be a scam. This is why you should only shop for car loans with reputable lenders that have solid online reviews or have been vetted by comparison sites like Finder.
Avoid these three pitfalls if you want to reduce your car loan approval time:
If you’re wondering how long it takes to buy a car, your car loan approval time will vary depending on which lender you take out financing with. Most lenders don’t offer instant car loan approval, but you should be able to get financing within a couple of hours or days. You can also choose to get pre-approved for financing so that you’ll already have money lined up to spend when you decide on a vehicle.
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