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 include what type of lender it is, your personal finances and the type of car you’re interested in buying.

How long the top providers take to approve a car loan

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 10–15 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 pre-approval 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.

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

Car loan pre-approval generally takes the same amount of time as getting approved – sometimes a few seconds, sometimes a few days. Car loan pre-approval is a way to lock in rates with a lender before signing the paperwork 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.

Pre-approval generally involves a hard credit check, which briefly lowers your credit score. And you need to submit documents verifying your income, residency and other aspects of your application.

Banks and credit unions tend to take longer than online lenders, while dealerships are often 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.

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 which 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 pre-approved and have found a car, have the dealer send the car’s info to your lender immediately so it can finalise 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.

Other factors to consider when getting a car loan

• APR. Your annual percentage rate (APR) includes both interest 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

A quick turnaround from a lender will get you in the driver’s seat 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

• Is there a difference between pre-approval and full approval?

  Yes. Pre-approval can be done 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, though. 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 will I have to look for a car after being pre-approved?

  Many lenders give you anywhere from 30 to 60 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.

• Does pre-approval guarantee a car loan?

  It can, barring any significant changes to your personal finances before signing the paperwork. Unlike pre-qualifying for a car loan, pre-approval involves the same steps you would take when getting approved for a car loan that you sign off on right away.

• Which 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 licence, 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.

Written by

Chris Lilly

Head of publishing

Chris Lilly is Head of publishing at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more. See full bio

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Chris has written 612 Finder guides across topics including:

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