How long does it take to get approved for a car loan?

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How long does it take to get approved for a car loan?

It can take as little as a few seconds and as long as a few days to get approved for a car loan. How long it takes depends on several factors. These including what type of lender, your personal finances and the type of car you’re interested in buying.

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:

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 our table shows.
• 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.

How long does it take to get preapproved for a car loan?

Car loan preapproval generally takes the same amount of time as getting approved — sometimes a few seconds, others a few days. Car loan preapproval is a way to lock in rates with a lender before signing the paperworks so you have time to shop around. This gives you the ability to negotiate down your price and determine exactly how much you need to borrow.

Preapproval generally involves a hard credit check, which briefly lowers your credit score. And you must submit documents verifying your income, residency and other aspects of your application.

How long will it take my lender to finalize my loan?

Banks and credit unions tend to take longer than online lenders, while typically dealerships are faster than lenders. If you need to provide more documents than usual to verify your identity or income, it could also slow the process down. Buying from a private seller rather than a dealership can also take longer.

• Online lenders
• Banks and credit unions
• Dealership financing

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.

• Not checking if you qualify

  Getting rejected for a car loan can slow down the whole process. Make sure you’re eligible before you apply for a car loan by checking your lender’s minimum income requirements, credit score and vehicle standards.

Compare car loan providers

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Name	Product	Filter Values	Minimum credit score	APR	Loan term	Requirements
PenFed Auto Loans			Varies	Starting at 5.19%	3 to 7 years	Active membership with PenFed	One of the largest national credit unions in the U.S., it offers new and used auto financing with transparent low rates.	Go to site More Info	Compare	loading Fetching your data...
CarGurus			Varies	Varies depending on the lender	3 to 6 years	Varies depending on the lender	Go to site	Compare	loading Fetching your data...
Carvana			No minimum credit score	3.9% to 27.9%	1 to 6 years	18+ years old, annual income of $4,000+, no active bankruptcies	Get pre-qualified for used car financing and receive competitive, personalized rates.	Go to site More Info	Compare	loading Fetching your data...

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Other factors to consider when getting a car loan

• APR. Your annual percentage rate (APR) includes both interested and fees. It’s the easiest way to compare the cost of car loans with similar terms.
• Down payment. Lenders generally recommend that you make at least a 20% down payment on your car to offset the cost of financing.
• Loan term. Go for the shortest loan term you can afford to save on interest.
• Availability. Many lenders have restrictions on which cars they’ll work with. Make sure yours can finance that vehicle you’ve had your eye on.

Bottom line

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.

Frequently asked questions

What’s the difference between preapproval and full approval?

Preapproval can happen quickly — usually the same day you apply — and gives you an idea of the loan you might qualify for. It doesn’t mean that you’re guaranteed to be approved for a car loan, however. Your lender will still need to underwrite your application, check your documents and confirm the car you’re buying before you can be fully approved.

How long do I have to look for a car after being preapproved?

Many lenders give you 30 days to shop around for the car you want. Your final interest rate, loan term and loan amount will depend on the vehicle you choose.

What documents will I need to submit?

Although it varies by lender, you’ll usually need to submit at least one of the following:

• Proof of identity. Your driver’s license, passport or other government-issued ID should all work fine.
• Proof of income. This can include bank statements, pay stubs or tax returns. If you’re unemployed, your lender may request to see proof of your benefits and monthly income.
• Proof of residence. Either your lease agreement, mortgage statement or utility bill can be used to prove where you live.
• Proof of employment. Providing the name of your employer and its contact information should be enough. Your lender may then contact your employer as confirmation.