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How long will it take for your car loan to be approved?

Learn how quickly you can get on the road with your new vehicle.

Applying for a car loan can seem daunting. You need to gather a lot of information about both yourself and the car, and then you have to wait to find out if you’ve been successful. Knowing how long that wait will be before you apply can give you some peace of mind and help you better plan your vehicle purchase.

Find out all about the process and how long it will take below.

The car loan application process

When you apply for a car loan the length of time it takes will depend on several key factors:

  • Submitting your application. As most lenders offer online applications, this usually only takes ten to fifteen minutes. If you have all the required documentation ready, getting the first step done online or in-person are both fast and efficient.
  • Immediate response. You may receive an instant response at this stage, but most lenders will take approximately one to three business days to review and approve your loan request.
  • Loan disbursement. After receiving approval from your lender, you can generally expect to receive your funds within one to three business days. However, it’s best to confirm specific timing with the lender you choose.

Ways to speed up your loan approval

If you want to get your loan approved quickly, ensure that you’ve done the following prior to making the loan request:

  • Be clear about your eligibility and required documents. Lenders will most certainly reject your loan if you do not meet their minimum eligibility requirements, some of which are imposed by the government and others that vary from lender to lender. Are you at least 21 years of age? Do you meet the minimum monthly income? These are few of the eligibility requirements you need to meet before making a loan enquiry.
  • Have all required documents ready. Make sure you have prepared a copy of your ID card, income documents (such as computerised payslip, income tax notice of assessment or latest six months CPF contribution), completed loan application form and work permit (for foreigners only) on hand. If you’re unsure, go the extra mile and contact the lender beforehand to find out the various types of documentation they’d require from you.
  • Calculate your down-payment. Undertaking a car loan is a large financial commitment. Do your maths prior and make sure it’s within your means, and you meet the lender’s minimum requirement before applying. If you cannot make the appropriate down payment, your loan request is not going to be approved. Don’t risk leaving unnecessary black marks on your credit file with a loan rejection. Also, avoid walking in with just enough money to pay the down payment – there are likely to be other fees involved that are not part of the down payment. Contact the lender in advance to check if there are any other expenses that you can expect.
  • Make a loan request that is within your means. Banks and finance companies commonly use 20-40% of your salary as a gauge to determine if you’re able to afford the monthly repayments. However, that amount assumes that you don’t have other debts to service, such as home loans.
  • Know your credit score. Lenders will take your credit score into account to make their decision. Although they can loan you up to 70% of the car purchase price, lenders are not obliged to give you that amount. Check your credit score and determine if it looks good enough for the lender to give you the green light, especially if you have other ongoing loans and debts.

What can slow down your application?

There are various issues that can delay the approval of your car loan application, so make sure you avoid the following:

  • Not submitting all required documents. Lenders can only fully approve your loan once all documents have been received. If they are waiting on certain documents, they may need to contact you to have you send them over, or they may only be able to conditionally approve you. Make sure you check what documents are required before you apply.
  • Applying after the deadline. Some lenders can offer same-day approval if you apply by a certain time, for example by 2pm. You can confirm this on the lender’s website before you apply. If you aren’t sure, contact the lender or apply early in the morning to ensure the quick application processing.
  • Failing to provide enough information about your vehicle. This is especially true if you’re purchasing a used or older car. Make sure you provide requested information. An older or classic car may mean it needs to be manually valued, which can slow down the application further.

What is pre-approval?

If you haven’t found your car yet you may want to opt for pre-approval. Although pre-approvals are not very common among lenders in Singapore, some dealerships and lenders do offer it as an option, especially for those with less ideal credit. Pre-approval means you have been approved for a specific loan amount and you can use up to and including that amount when you go out to buy your car.

You may need to submit additional documents or speak to a loan specialist for full approval. Pre-approvals generally come with higher interest rates as well.


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