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.
How long does finance approval take for a car?
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.
Is there a difference between pre-approval and full approval?
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.
How long does the car loan application and approval process take?
Here’s an idea of approximately how long you can expect each step in the application and approval process to take:
Submitting your application. It usually only takes 10 to 15 minutes to complete an online application. If you need to visit a lender in person, you’ll need to reserve at least a few hours.
Immediate response. Some lenders offer instant car loan approval through a streamlined pre-approval process. This means you’ll know how much you qualify to borrow as soon as you submit your application (though it could take a bit longer to actually access financing).
Full approval. Car loan approval times can differ among lenders, but generally you can expect the process to take between a few hours to a few days. This is assuming that there are no unexpected delays and your application isn’t overly complex.
Loan funding. After receiving full approval for your car loan from your lender, you can generally expect to receive your funds within one and three business days. That said, you’ll want to check in with your lender directly to confirm your own unique car loan approval time.
How long does it take to get pre-approved for a car loan?
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.
How long will it take my lender to finalize my loan?
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
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.
Banks and credit unions
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.
Dealership financing
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.
How can I get instant car loan approval for bad credit?
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.
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What can slow down my application?
Avoid these three pitfalls if you want to reduce your car loan approval time:
Not submitting all required documents. Lenders can only fully approve your loan once all the required documents have been received. If your lender is waiting on proof of income or residence, it could hold up your application. To speed up the process, check what documents are required and have them on hand before you apply.
Applying late in the day. Some lenders can offer same-day approval if you apply by a certain time, usually by the end of the business day. If you apply outside of business hours or on a weekend or a holiday, your application may take longer.
Not providing enough info about your vehicle. Your lender may require you to submit information about your vehicle before it releases funds, especially if the car is being used as collateral to secure your loan. Make sure your dealer sends this information to your lender as soon as possible to speed up your car loan approval time.
Other factors to consider when getting a car loan
APR. Your annual percentage rate (APR) includes both interest and fees. It’s the easiest way to compare the cost of car loans with similar terms.
Down payment. Your lender may require you to have between 15% and 20% saved up before they approve you for financing.
Loan term. You may want to choose a short-term loan to save money on interest, or go with a longer term loan if you want to lower your monthly payments.
Availability. Many lenders have restrictions on which cars they will finance (for example, some won’t finance used vehicles). Make sure your lender is willing to give you financing for the vehicle you want.
Bottom line
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.
Frequently asked questions
You’ll typically have to wait between a day and a week to get approved for a car loan with most online lenders. You may have to wait several weeks to get approved if you submit your application with a bank or credit union.
You can get approved for a car loan from a dealership on the same day that you find a vehicle you want. Just make sure that your interest rates are locked in and your loan contract is set in stone before you sign on to dealership financing. You may also want to compare interest rates with other lenders since you could end up paying way more with your dealer.
You usually won’t be able to get instant approval for a car loan unless you apply directly with a dealership for financing. Getting instant car loan approval with a private lender or bank is usually not possible, unless you’ve already been pre-approved.
Typically, no. You’ll almost always have to go through a regular approval process to get a car loan with bad credit (which will typically take at least a few hours or even days). You should avoid lenders advertising instant car loan approval for bad credit as they may be fraudulent.
Some banks approve car loans on weekends if you make an appointment and their financing team is in-house. It really depends on the bank and whether you’ve already got some form of pre-approval in place.
You’ll usually need to verify your identification and provide proof of employment and a steady income. You can do this by submitting documents such as your ID, employment letters, pay stubs and tax returns. You may also be required to provide proof of address and citizenship or permanent residency.
Claire Horwood is a writer at Finder, specializing in credit cards, loans and other financial products. She has a Bachelor of Arts in Gender Studies from the University of Victoria, and an Associate’s Degree in Science from Camosun College. Much of Claire’s coursework has focused on writing and statistics, with a healthy dose of social and cultural analysis mixed in for good measure. In her spare time, Claire enjoys rock climbing, travelling and drinking inordinate amounts of coffee.
Who is currently offering zero percent financing on cars in Canada? See offers from popular car brands in Ontario, BC, Alberta and more.
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