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Online car loans

Many lenders offer same-day approval.

Applying for a car loan online allows you to compare lenders and speed through the application process. But to avoid hurting your credit score, only submit a full application to the lender you’re most interested in.

How do I apply for a car loan online?

To apply for a loan online:

  1. Fill out the online application. This will likely include giving the lender information about yourself, your finances, your credit and the car or loan amount you’re interested in. Be honest and make sure you provide accurate answers to avoid any trouble later on.
  2. Gather supporting documentation. You may be able to upload your documentation directly to the loan application, or you may need to fax or email them in.
  3. Wait for the lender’s decision. Once you’ve submitted your application and supporting documents, your lender will either notify you of its decision or ask for further information. In many cases, lenders can give you approval or preapproval almost instantly after submitting an application while supporting documents and other requested information are still pending.
  4. Review and sign the contract. If approved, your lender will send you a loan contract for review. This contract contains vital information including your loan term, repayment schedule and interest rate, so take your time reviewing it. After reviewing, if you’re comfortable with the terms, you’ll sign the contract and return it to your lender, who will then distribute the funds to the vehicle seller.

Compare a range of online car loans

1 - 4 of 4
Name Product Filter Values Minimum credit score APR Loan term Requirements
PenFed Auto Loans
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.
Varies depending on the lender
3 to 6 years
Varies depending on the lender
5.69% (as low as)
1 to 6 years
18+ years old, US citizen or permanent resident
A car loan connection service for borrowers looking to refinance.
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.

What do I need to apply for a car loan online?

The information and documentation you need to complete the application will vary by lender. But in general, you should have the following on hand:

  • Personal information. This includes information such as your driver’s license number, contact information, income and residential status.
  • Employment information. This includes details regarding your employment history to help your lender assess your stability as an applicant.
  • Requested loan details. You’ll need to provide your requested loan amount along with your preferred method of repayment.
  • Driver’s license or certified ID. Your driver’s license or other valid identification is used as proof of your current address and to help your lender conduct a credit check.
  • Proof of income. These include bank statements, pay stubs, financial statements, rental income statements or anything else serving as proof of the income declared on your application.
  • Proof of insurance. Depending on the lender, you may be required to provide proof of insurance on the car you plan to purchase.
  • Vehicle details. Some lenders may ask you for information about the vehicle you’re planning to buy — including the make and model — as well as the seller’s asking price, name of business and address.

Pros and cons of applying for an online car loan


  • Quick process. Many lenders can come to a decision on the same day you apply and, in some cases, you can get funds disbursed in as little as one day.
  • More options to choose from. You’re not restricted to just banks or credit unions when applying for a car loan online, giving you a wider selection of lenders to choose from.
  • Convenience. Applying for a car loan online is usually more convenient than having to apply in person at a dealership or bank.


  • Easy to over-apply. Lenders may deny your application if they see you’ve been applying for too many loans within a short period of time. Doing this also lowers your credit score.
  • Short preapproval window. Keep in mind that any preapproval you get from a lender will likely expire in 30 days.
  • May come across shady lenders. When considering your online car loan options, it’s easy to come across a lender you’re not familiar with. Research the lender’s website security, business practices and borrower reviews to make sure it’s legit before applying.

What cautions should I avoid?

When applying for any car loan — online or in person — try to avoid the following:

  • Getting into too much debt. Since car loans involve a lengthy financial commitment, make sure you can afford the repayments required by your lender.
  • Getting mixed up with shady sellers. Avoid any seller that tells you to falsify information on your loan application. Not only is it illegal, but you carry all the risk while the seller carries none. In addition, make sure you’re fully aware of the car’s condition before buying it. Have any used car you’re interested in inspected by a mechanic not connected to the seller.

Bottom line

Applying for a car loan online is easy, but that doesn’t mean it’s a good idea to apply for multiple loans at once. Instead, compare your options before getting started and only apply to the lender you’re most interested in.

Frequently asked questions

Picture: Shutterstock

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