How long could it take to get a decision on my car loan?

14 Sep 2021

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Car loans can typically be processed within a couple of days, faster if you need it. The speed will be affected by issues such as how much documentation you can provide promptly, your credit history, and your residency status.

While some car lenders claim to offer immediate approval, the timeframe will always depend upon how fast the borrower provides their supporting documentation.

If you have a poor credit record, you may also need to wait longer as the lender may require more supporting information.

Steps in car loan approval process

There are a number of steps in a car loan application and, at each stage, various problems can cause a delay.

Step 1 – Application

The first step in any car loan application is to lodge an application. You can apply for a car loan online, or by calling us on 1300 889 669 and speaking with one of our friendly car loan specialists.  You will need to provide basic information about yourself including your name, address, phone number, and email address.

At this stage, we’ll ask some pre-qualification questions to assess whether you are eligible for a loan with various lenders. These will include whether you are an Australian citizen or resident, whether you are over 18, if you have a job, and how much you spend and earn.

Step 2 – Formal credit check

Once they receive an application, your lender will make a formal credit inquiry about you to find out about your creditworthiness. Government-issued identification is required to do this, such as a driver’s licence or a passport. These days, credit checks are done online so they are instant. However, you can slow the process down if you can’t submit ID straight away.

At this stage, you may receive conditional approval for a loan. Alternatively, you may be asked to submit further documentation.

Step 3 – Documentation and supporting evidence

If you pass the first requirements, lenders will do further checks on your residential record and work history.

If you have a poor credit record, you may be delayed as lenders double check your information with employers, landlords, and other creditors to make sure it is right. This is where a good broker can really help, they’ll know what you need before you apply, so you can get everything ready beforehand.

Step 4 – Settlement

Usually, the car dealer will send the vehicle transfer documentation to your lender to finalise the purchase.

They will make arrangements with the dealer to let you pick-up your new car once the loan is settled.

What can cause approval delays?

Lack of required documents

To get a car loan, you will need to provide a range of documents that prove you’re a reliable borrower.

These will include:

  • Personal information and identification
  • Proof of income
  • Proof of assets and liabilities
  • Information about your car and insurance

Failure to provide those documents will delay approval.

Poor credit history

Your credit score is your unique number that rates how lenders view your suitability as a customer. If you have a bad credit score from defaults in payments or bankruptcy you will be less likely to be approved for a car loan quickly.

We have lenders that can provide you with a car loan if you have bad credit, however, they will often ask for a higher initial deposit or a cosigner to make sure repayments are paid on time.

Fun Fact: In Australia, you get marks against you on your credit file when you do something wrong. You don’t get bonus points for doing something right (like in the USA). The good news is that you don’t have to worry about having "no credit history" as this should not be a problem here.

Not providing enough info about the car

We need to know the details of the car you wish to buy, so we know how much it will cost and how much you’ll need to repay.

When purchasing a car, you will generally need to supply the following:

  • A dealer invoice or contract of sale (contains address, contact numbers and ABN)
  • The vehicle chassis number
  • The year, make and model of the car
  • Information on the vehicle’s registration

It’s highly likely you will also need to provide proof of comprehensive car insurance before receiving the stamp of approval. This is so you can repay the loan in full if the car is ever damaged so badly it needs to be written off.

Can you buy the car as soon as you have approval?

Absolutely! Once you have received final approval for a car loan, you can buy it.

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