What to expect when applying for a car loan to get on the road faster.
Applying for a car loan can be a daunting process, especially if you don’t know how long to expect from first filling out the application to driving your car off the lot. You can narrow down your loan options by comparing how long different lenders take to process your car loan application.
How long top providers take to approve a car loan
While many lenders offer preapproval when applying for a car loan, not all do. Here’s what you can expect from top car loan providers:
|Lender||Is preapproval available?||How long is the approval process?|
|LightStream||No||Same-day approval may be available|
|Auto Credit Express||Varies by lender||Varies by lender|
|car.Loan.com||Varies by lender||Varies by lender|
|LendingTree||Varies by lender||Varies by lender|
|Bank of America||Yes||60-second approval||Read review|
|USAA||Yes||Same-day approval||Read review|
|Chase||No||From three hours up to three business days||Read review|
|Navy Federal Credit Union||Yes||Five-minute approval||Read review|
How long does the car loan application process take?
It depends on the lender you choose to apply with, the amount you need to borrow and your creditworthiness. Here’s an idea of how long to expect for each step in the application process:
- Submitting your application. It usually only takes 10 to 15 minutes to complete an online application. However, if you have to visit a lender’s office to apply in person, it could take longer.
- Immediate response. Some lenders offer instant preapproval after you submit your application. Those that don’t could take a few days to get back to you.
- Full approval. The turnaround time for full approval differs, as you can see from the table above.
- Loan funding. After receiving full approval from your lender, you can generally expect to receive your funds within one to three business days. However, it’s best to confirm the specific timing with your lender.
If you’ve been preapproved for a loan, your lender may allow you to shop for a car before you finalize your loan. This gives you the ability to negotiate down your price and determine exactly how much you need to borrow.
How long will it take my lender to finalize my loan?
The four main types of lenders — online lenders, banks, credit unions and dealerships — have car loan application processes that all take different amounts of time to complete. Here’s what you can generally expect, though you should consult with your lender to get a clear picture of exactly how it works.
Online lenders tend to have a quick turnaround when it comes to preapproval. If you apply during business hours, you may see a response the same day. However, your lender won’t be able to fully approve you and fund your loan without first receiving 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 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 approval time for car loans from banks and credit unions varies. Some have quick online applications that take the same amount of time to approve as an online lender. Others require you to visit a branch, fill out an application and wait days for the more traditional approval process. Because the time varies so widely, talk to your bank or credit union to see how long it might take.
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 financing, also called spot delivery, is when your dealer allows you to drive off the lot before the financing is in place. If you don’t have good to excellent credit and a strong income, you might have to renegotiate your loan — usually for a less optimal rate — or return your car. This is commonly referred to as yo-yo financing because the lender promises you one monthly payment or interest rate, then readjusts it if it can’t find a lender to approve you.
Make sure your purchase agreement doesn’t have language that states your loan is subject to approval. If so, your quick loan approval time might not mean much.
What can slow down my application?
If you want to have your loan in hand quickly, avoid these three pitfalls when submitting your application:
- Not submitting all required documents. Lenders can only fully approve your loan once all the required documents have been received. If yours 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 the weekend, your application may fall to the back of the queue.
- Not providing enough info about your vehicle. This is especially important if you’re purchasing a used car, as some lenders have year and mileage limits. If you’ve already been preapproved and have found a car, have the dealer send the car’s info to your lender immediately so it can finalize your loan.
Compare car loan providers
Quick turnaround from a lender means you’ll be in the driver’s seat of your new car faster. Provided you submit all of your documentation and apply during business hours, there are plenty of lenders that can process your application within just a few days.
Want to compare other options? Browse our guide to car loans to learn more about how they work and what else to look for in a lender.