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Car loans take about one to two days on average to process before formal finance approval, which can occur as soon as within 48 hours. This can be influenced by a few factors, such as your credit history, providing enough documentation promptly, verifying your identity and your details of citizenship or permanent residency.
Some lenders may advertise “60-second approvals” or “overnight approvals”, which often refer to pre-approvals or are evidence of untrustworthy practices. It’s important to know what to expect when it comes to your car loan approval time, so you can find out more about the various factors which can impact the speed of your application here with Savvy.
What can influence the speed of approval for your car finance application?
A range of factors can slow down or speed up your online car loan application. It’s important to understand the steps involved in the application process and how each of them can vary in terms of the time they take. These include:
Submitting your application
The first step in any car loan process is to apply. This requires you to submit basic information and contact details such as your name, address, phone number and email address.
At this step, the lender will ask some pre-qualification questions to determine your eligibility. This may include if you’re an Australian citizen or resident, over the age of 18 and employed. They’ll also seek out estimates of income and expenditure. If you’ve satisfied these requirements, you must consent to a formal credit check.
A potential delay can occur at this stage if the applicant takes more time to complete the online form or is unable to provide the correct information. It’s also worth preparing your documentation in advance, to save on potential delays when it comes time to submit your formal application.
Providing your documents and having a credit check conducted
This part of the application allows a lender to make a formal credit inquiry to determine your creditworthiness. Credit checks are instant when conducted online. However, you’ll need to have submitted your documents by this point, which can include:
- 100 points of ID
- Proof of income and savings (such as your last two payslips and 90 days of bank statements)
- Proof of address
- Proof of assets and liabilities
- Details about the car you’re buying, such as the make, model, age and condition
- Proof of car insurance (must be comprehensive)
This part of the process can be slowed down by taking more time to submit your documents.
Sending through any required additional information
At this stage, your lender may require additional documentation or information to verify your financial situation. This may include further checks on your residential history, employment history and more.
Customers with bad credit or more complex financial situations may experience delays, as lenders may take more time to properly assess whether they’re in a position to take on the loan they’re applying for. This could include double-checking with employers and landlords to ensure their information is correct.
Having your application approved and settled
If you’re formally approved, you’ll be sent a loan contract to sign which outlines all the terms and conditions of your agreement. Returning this promptly will help avoid any potential delays on your end.
When it comes to transferring funds, many lenders will liaise with your dealership or private seller or otherwise gain their information to send the money to them directly. However, in some cases, they may transfer the money into your account, which you can then pass on to the dealer.
Delays can occur depending on your lender’s processing time in this instance, as some may take longer to send the money out, especially if there’s a large backlog of other loans to sort through.
Other common delays in car loan applications
Some lenders may have cut-off times for processing. They may advertise a quick turnaround time, but this will be subject to a few factors. You may have to apply in the morning or before a certain time (such as 2:00pm) to ensure the lender has time to process your application, provided you don’t need to supply additional documentation. If you submit your application after hours or on the weekend, it’ll likely take longer to receive approval.
The other common delay in car loan approvals is providing incomplete or incorrect paperwork. Your lender needs to be crystal clear about your financial situation and the car you’re buying before they can give the green light to any application. This is especially the case for used or vintage car buying scenarios when an independent or manual valuation may be required to determine the risk involved with financing the vehicle (which can ultimately influence your chances of approval).
Bill Tsouvalas, Managing Director of Savvy, says that ensuring all your information is correct and up-to-date is essential in the car loan approval process.
“Delays caused by applicants who don’t have all the required documentation or information are common and easily avoided in the car loan process”, he said.
“That’s why it’s crucial to take the time to carefully go over your lender’s requirements before you start your application so you can be sure of exactly what you need and have it ready to go.”
How to make your car loan approval as speedy as possible
- Read the eligibility criteria: figure out if you’re eligible for a loan before applying. This can prevent you from going through a process and finding out you’re unable to proceed further. Eligibility criteria also extend to your car, as lenders will have age limits on the vehicles they’re able to finance.
- Gather your documents: have all your documents, such as 100 points of ID, bank statements, residential history, income slips and other evidence ready so you can submit them immediately. As mentioned, this is a common and easily avoidable source of delays.
- Apply as early in the day and week as possible: to get a car loan approved within or before the 48-hour window, you should apply as early in the day and week as you can. Applying in the afternoon or evening might mean your application isn’t reviewed until the next day (or week if you apply on a Friday).
- Keep in constant contact with your lender: if your loan consultant needs more documentation, make sure you can take their call so you can get onto submitting them right away.
- Consider car loan pre-approval: pre-approval can be granted sooner than formal approval, as it’s a conditional indication of what your lender would be willing to approve based on the information provided in your pre-approval application. While these aren’t guarantees of approval, ensuring your financial situation remains stable and that you buy a car within your lender’s eligibility criteria may help the process run more smoothly.
Different types of loans and how long they can take to be approved
Secured car loans
Secured car loans are a type of loan where your car is tied to the value of the loan as collateral. You may need to go through a conditional approval process and find a car to purchase before the funds are released to you or your dealer. As mentioned above, these loans can often take around 48 hours to be formally approved, though this may occur sooner or later depending on your circumstances.
Unsecured car loans
Unsecured car loans are a type of personal loan where funds are released directly into your bank account for your car purchase. These are often the quickest type of loan, as there’s no need for your lender to consider whether the car you’re buying is suitable as collateral for the loan. Instead, the application and approval are based solely on your personal situation. As a result, these can be turned around within 24 hours in some cases.
Chattel mortgages
Chattel mortgages are essentially car loans designed for the purchase of business vehicles. They come with a few tax benefits specific to businesses, but otherwise follow much of the same process as a car loan and can be turned around in a similar timeframe. More scrutiny may be placed on borrowers in terms of the usage of their vehicle, as it must be at least 50% for business purposes.
Novated lease
Novated leases are an arrangement between an employee, employer and car dealer. This agreement involves your employer deducting lease payments from your pre-tax income, which lowers your income tax as a result. At the end of the lease, you have the option to purchase the vehicle outright. This may take the most amount of time due to the number of parties involved, but some leasing companies advertise approvals as soon as the same business day.
Bad credit car loans
Bad credit car loans are secured car loans that have higher than usual interest rates due to the risk profile of the prospective borrower. These often take a bit longer to process than other loans due to more documentation and verification required but, like novated leases, there are companies in the market who specialise in this type of loan and can
Common questions about the time it takes to get a car loan approved
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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
Approval for car loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.
The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.
