How online car loan approval works |
online car loan approval

How online car loan approval works

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Online approval for your car loan can save you time and help you find the best possible rate.

Walk into the car dealership confident in your bargaining power and your budget. Shopping online allows you to compare potential interest rates so you’ll be able to secure a good deal before you ever set foot in a dealership’s office.

Financing gives you better negotiating power so you’ll be able to avoid the high rates and huge fees that can come with getting dealership loans. The online application process usually takes just a few minutes, and you’ll learn if you’ve been approved quickly.

Our guide takes you through the steps of applying for a car loan online and guides you in the right loan decision for you. Car Loans

Our top pick: Car Loans

Get matched with a local car dealership to finance your car purchase. Bad credit, no credit OK.

  • Specializing in 'buy here, pay here' car loans. No banks or credit unions.
  • Typically hear back from a rep within 24 hours.
  • Free loan-matching service. No obligation offers.

    Compare top car loans you can apply for online

    Rates last updated September 22nd, 2018

    Reveal your potential loan offers and rates

    Answer two quick questions to filter the loan offers and get the best one for you.

    Select your credit score range

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    Finally, select where you live.

    To get your credit score:

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    Experian is a leading provider of personal and business credit reporting. Find out your FICO score now for less than the cost of a cup of coffee.

    Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
    Name Product Product Description Minimum Credit Score Term of Loan Requirements Car Loans
    Apply with a simple online application to get paired with a local auto lender. No credit and bad credit accepted.
    Varies by lender
    Must be a US citizen with a current US address and employed full-time or have guaranteed fixed income.
    Auto Credit Express Car Loans
    Get connected with an auto lender near you, even if you have bad credit.
    Typically 3 to 6 years
    Must be employed full-time or have guaranteed fixed income of at least $1,500/month and be a current resident of the US or Canada.
    LendingClub Auto Refinancing
    Lower your monthly car payments and save on interest through a fast and easy online application process.
    Fair or poor credit
    Minimum of 2 years
    Car must be less than 10 years old with fewer than 120,000 miles. Current loan must have a balance between $5,000 and $55,000 and at least 24 months left in its term.
    MotoRefi Car Loan Refinancing
    A car loan connection service for borrowers looking to refinance.
    1–6 years
    Must have an income of at least $2,000/month and have a vehicle with less than 100,000 miles. Car Loans
    Get up to four offers in minutes through one simple application. Multiple financing types available including new cars, used cars and refinancing.
    24 to 84 months
    Must have a Social Security number; make $24,000+/year; have no open bankruptcies.
    LendingTree Auto Loans
    Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out.
    Typically 1 to 7 years
    Must be a US citizen and 18+ years old. Must have good to excellent credit.
    Capital One Auto Financing
    You could qualify for a car loan of up to 40000, but not all dealers accept this bank's financing.
    Good to excellent credit
    36 to 72 months
    Valid street address; existing Capital One accounts in good standing. Car must be a 2006 model or newer with less than 120,000 miles.
    Wells Fargo Auto Loans
    Auto loans with high loan amounts to cover your car purchase or refinancing needs.
    Good to excellent credit
    1 to 6 years
    Your income and assets must support your existing debt obligations and the desired loan amount.

    Compare up to 4 providers

    How does online car loan approval work?

    Being approved for a loan online is much like being approved for a loan when you visit the physical location of a lender. You fill out the necessary paperwork and wait to see if you’ve been approved.

    If the lender agrees to finance your loan, it’s time to walk into a dealership and start negotiating for a car. You’ll already know how much you can borrow and the interest you’ll have to pay, so you won’t have to rely on the dealer to give you a good rate.

    What do I need to know before I apply?

    Before you apply, you’ll need to know how much you can borrow and what type of payment plan you can handle so you can prepare your finances for the cost of your new or used car.

    Most lenders offer you a pre-approval that will last up to 30 days. This gives you time to search for a car and solidify your choice before committing to the loan and starting payments.

    How to compare online car loans

    Car loans are offered by banks, credit unions and independent lenders. With so many options on the market, it can be hard to know which one to choose or where you should start. Review these tips to help you find a loan that suits your individual needs.

    • Application process. Some lenders have systems that can analyze your application quickly and provide an answer in very little time. Others might need to verify some of your information by phone or fax. Pick a lender that makes things easier for you.
    • Down payment. The amount of your down payment can impact the rates a lender can give you as well as how long you need your loan to last. So the more the better. You can even use a trade-in car as part of a down payment.
    • Total cost. The total cost of a loan is included as the APR. If you compare two loans for the same amount, interest rates and fees affect the total cost of the loan. Check the total cost when comparing your online car loan options.
    • Documents needed. Will you need to fax a copy of your auto insurance or your driver’s license? Can these things be verified online, saving you time? These factors should help you determine which lender you’d prefer to go with.
    • Dealership connections. If you’ve decided to go through a car loan connection service, research the dealers it partners with to make sure you’ve found a reputable source that you’re comfortable buying from.

    Pros and cons of getting an auto loan online


    • Quick decision. An online application takes just a few minutes, and you’ll know if you’ve been approved for a loan shortly after.
    • Simplified negotiation. You won’t go into a dealership unsure of how much you can afford when you have an online loan. This makes negotiating the price simpler since you’ll know exactly how much you can pay for a car.
    • Easy comparison. The best part of shopping is comparing your rates. With online applications, you can compare rates from multiple lenders with the click of a few buttons.


    • May seem complicated. Being approved online adds an extra step to the already complicated process of buying a car, and it may not be worth it if you know your dealer has good financing.
    • Not always the best rates. Depending on your credit, a lender may not offer you the best rates. Be open to seeing what type of financing your dealer has before settling on an online loan.

    How to apply for an online car loan

    Unlike the old days where each form was filled out and scanned individually by the lender’s underwriting team, online loans are fast and easy to complete. Every lender is different, but these are the basic steps you’ll need to follow when submitting a loan application:

    1. Browse the table above and find a lender that fits you.
    2. Click the Go to Site link to be redirected to the lender’s website.
    3. Fill out the application with your personal and financial information.
    4. Submit your application.

    Most lenders will be able to tell you if you’ve been approved within a few minutes. You can view the interest rate and potential fees before you sign the loan contract. This makes it easy to compare loans.

    Once you’ve decided on a loan, sign the necessary documents and submit. You’re ready to step into a dealership with financing to back you up.

    Cautions to avoid before agreeing to the loan

    The amount you qualify for doesn’t include the fees and taxes you’ll have to pay. For instance, if you’ve been approved for a car loan of $25,000, remember to search for a car that costs a few thousand less to cover any additional loan expenses.

    Consider how much you’ll need to pay each month and whether your loan has traditional payments or balloon payments. A balloon loan has a short term where your payments mainly cover interest. At the end of the term, you’ll owe the remaining amount of the principal as one lump sum. It’s a repayment option that works for some people, but review your finances and ability to repay the loan before committing.

    Finally, try to seek multiple lenders before choosing an offer. Comparing your rates is crucial when it comes to getting a good deal. You’ll want to know the fees and interest rates each loan carried before making a final decision, and this will help you finalize your decision.

    Bottom line

    Finding approval online doesn’t have to be a time-consuming process. With a few clicks, you could be well on your way to financing your next auto purchase. Before you do, compare multiple auto loan offers and read up on what you should expect.

    Frequently asked questions


    Matt is a personal finance publisher who likes nothing more than seeing consumers get a better deal!

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