How Long Does Finance Approval take for a Car?

The longer the wait, the better the bait.

Purchasing a car is a major life achievement; however, most people dread the process of obtaining a loan. If you are among the many car finance seekers who wish to know, ‘How long does car finance take to be approved in Australia?

Then know that if you grasp the time frame, then things become easier in terms of planning, and the pressure is minimized.

Here is what you need to know to have a smooth run through the entire process.

How Long Does It Take to Get Approved for a Car Loan?

The loan approval time depends on various factors like the type of loan, the lender’s policies, and your capacity to repay the loan. However, when the lenders approve the loan varies, and it is influenced by the verification process. The longer the lender takes the time to verify, the longer you have to wait.

To give you an idea about the loan approval time, here we have narrowed it down so that you can sit patiently.

1. Initial Application Process:

Car finance application is the very first procedure that one has to undergo when trying to get the financing for the car. This includes information such as your earnings, sources of income, your credit record, and the type of car you want to acquire.

Online Applications: There are types of lenders who provide the application online, which takes about half an hour to complete at most.

In-Person Applications: In the case of face-to-face communication, going to a bank or financial broker might take you more time due to scheduling of appointments and preparation of necessary papers.

2. Pre-Approval Timeline:

If you go for pre-approval, you will get the best estimate of what you can affordably borrow before overstating your chosen car. Pre-approvals are usually quicker than full applications. It can be approved in 1–2 working days. However, there are some lenders who make instant or same-day pre-approvals.

3. Full Application Review:

After this, you have to select your car of choice and complete the application process, and the lender proceeds with the assessment. At this level, there is acknowledgement of your documents, confirmation of your creditworthiness, and confirmation that the car meets their specifications, such as its age, condition, and value. This gets approved generally from two to five business days or an average of ½ to 3 days. These factors include the time taken to prepare your documents, among other activities that can affect the ability of the lender to process your loan.

4. Conditional Approval:

Upon passing the initial verification of your application, the lender may allow you a conditional approval based on which further checks may include a car check or inspection, among others. This process may take one to three business days, depending on how soon participants—you and the dealer—submit required information.

5. Final Approval and Settlement:

Final checks are when the lender approves the car loan and funds the car dealers to make the final payment. It is usually 1 to 2 business days. If necessary, some lenders can facilitate this in a short time period.

What Documents Do I Need for Car Finance Approval?

Before submitting the documents, collect all the documents in one place and beforehand so that your approval time gets less and your loan can be processed easily. The documents that you will require to present are:

1. Personal Information:

If you are taking a loan, you have to provide your basic details, like name, age, proof of residence, driver’s licence, passport, or Medicare card, so that the lender can verify your identity and personal information.

2. Vehicle Details:

If you are taking a car loan, then submitting the details about the car that you are purchasing is a must. It makes the lender the verifier that you are not using the money elsewhere. You have to submit the car details, including the date of origin, registration number, date of purchase, category, and whether it is old or new.

3. Insurance Documents:

Alongside the vehicle details, you also have to submit the insurance documents of the car.

4. Credit History:

The lender checks the credit history to know if you are receiving any other loan or if you are in debt or investing anywhere else.

5. Proof of Income and Employment:

You must prove to the lender that you are employed and receiving an income. The income should be sufficient enough to make repayment and sustain your basic amenities.

What are the factors that affect car loan approval times?

To avoid any delay from your side in getting the loan approved, make sure that you are befitting all the points mentioned below:

1. Your Credit Score:

Lenders are easily impressed by good credit scores as it reduces the risk on their loan amount. Good credit scores have higher chances of getting selected, and also on shorter time periods and with lower interest rates. Whereas a bad credit score can create a negative impression and can also reduce your chances of getting selected for the loan. Even if you get selected, they will charge you higher interest rates.

2. Lender’s Policies:

Each lender has different terms and conditions. What may be suitable for one lender may be a red flag to another, and the approval process entirely depends on the verification time they are taking.

3. Completeness of Documents:

Submitting incomplete or half documents can result in delayed approval. Ensure that you have submitted all the documents as mentioned by the lender in the correct time. The faster you submit the documents, the faster they will get approved.

4. Loan Amount and Term:

Approval time also depends on the amount that you are borrowing. If your loan amount is higher, then the lender will take extra time to think, and the duration will also be longer.

How to speed up the process of getting finance approval?

The lender will take its own time to approve the loan, but you can still make your process consume less time. You can follow these steps to do that:

Step 1: Prepare your documents

Collect all the documents that will be needed in the loan process earlier to avoid any delay in the loan process.

Step 2: Check your Credit Score

Before applying for any loan, check whether you have a decent credit score or not. If you have a poor credit score or an existing debt, try to improve or clear it in order to avoid any cancellations later.

Step 3: Choose the right lender

There are multiple lenders available that provide car loans. Choose the one that you consider the best.

Step 4: Respond accurately

After applying for the application, keep connected with the lender and maintain smooth contact. Submit all the required documents on time and ensure fairness.

What can slow down car loan approval?

1. Lack of Proper Documents:

Not submitting the documents on time can slow down the process as the lender has to wait for your submission. Thus, it is advisable to provide the required documents on time.

2. Poor Credit Score:

If you have a low credit score, then the lender might keep your application on hold or ask you for additional information about it, causing the process to slow down.

3. Incomplete Information about the Car:

Vehicle details are a must to confirm that you are taking the loan for that purpose only. So, you have to submit all the documents as well.

CONCLUSION:

The process of getting car finance approval in Australia can take anything from a few hours to one week depending on the financier and the client. If you get to know the process used and get prepared adequately, you can be assured that the process is conducted to the best standards, making you that much closer to driving away in your new set of wheels.

‘Car Finance for Pensioners’ is here to guide you with any queries related to car loans. Our website and blogs are specifically tailored for people who have trouble making the right decision regarding car loans. We understand the complexity of making the best choice.

FAQs about How Long Does Finance Approval Take for a Car:

1. How long does it take for car loan approval?

It entirely depends on the lender’s policies, and the approval time varies from lender to lender.

2. Can I get approval for car finance in one day?

Yes, some lenders approve loans within a matter of the same day or just a few hours if you apply online and attach necessary documents correctly.

3. Does pre-approval ensure approval in the final instance?

Pre-approval is not a guarantee either. However, general credit checks on the borrower and overall approval of the loan are completed by the lender; the final approval is contingent on the certain car details and other checks.

4. What should I do if my car finance application has been advanced and rejected?

Sometimes when your application is declined, the lender will be kind enough to explain to you why. Some of the leading causes are credit score or sourcing insufficient income to meet the credit limit. You may have to resolve these problems before recoating or look for other lenders.

5. How can I fasten the process of car financing?

Yes, making sure that all your documents are correct and you have everything you need, replying to lenders questions, and having a quick turnaround time from lenders can help.

6. Does the nature of the car I decide to obtain approval for affect my car?

Yes, lenders may want to carry out additional checks in respect of some vehicles, for instance, second hand cars or foreign-made cars, which may take time.