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Car Loan Approval Time: How long does it take?

Jacaranda Team

Written by - Jacaranda Team

February 22, 2021 5 minute read
Car Loan Approval Time: How long does it take?

Car loans can take anywhere from 24 hours up to one week to be approved, depending on the lender you apply through. There are some factors that can affect your car loan approval time, including credit history, supporting documents provided, verifying your identity and your citizenship or residency information. 

What can affect your car loan approval?

There are many factors that can either slow down or speed up your application’s processing time. 

Credit history check

Lenders will conduct a credit check on every loan application they receive. This is to verify their creditworthiness and is required by law to ensure an applicant can comfortably repay their loan. In most cases, a government-issued ID such as a drivers licence or passport is required to conduct this check. Credit checks conducted online are typically instant, so this part of an application can only be slowed down if an applicant takes time to submit their ID. 

Supporting documents

Your lender may request additional information from you to verify your finances. Once lenders have verified your identity, lenders conduct additional checks including residential history, employment history, and anything else that is relevant to your application. If there are any delays hearing back from employers or landlords (if it is necessary for them to contact these people), this will delay your application. This is usually only for bad credit customers, as lenders will double-check all the information that they have is correct. 

Application eligibility

When applicants apply for a car loan, the lender will outline their eligibility requirements. This may include verifying that the borrower is over 18 years old, holds Australian citizenship or permanent residency, and has a consistent income with affordability to repay the loan. If all of these requirements are met, the applicant must then consent to a credit check. 

If the applicant takes time to answer these questions, this can delay the rest of the application as they are unable to conduct credit checks or other verification checks. 

Loan settlement

Depending on the lender you apply through, you will either have the funds deposited into your account or sent directly to the car dealership. If the funds are to be sent to the dealer, the lender will send transfer documentation to complete the purchase. The dealer will release your car to you once they have confirmation that the loan is settled or that the transfer is in progress. If there is a delay in this confirmation being sent, or the dealer receiving this, it can take longer for you to receive your vehicle.

Other common car loan application delays

Another aspect that can delay your car loan application is the time that you apply. Lenders that can offer same-day approval, like Jacaranda Finance, will likely be unable to deliver this outcome if you apply late in the afternoon. This is because it does not leave enough time to conduct all checks and assessments required to approve your loan. 

Additionally, it can slow down the processing of your loan if you are slow to provide the information on the car you are purchasing. The lender will be unable to assess your affordability on the vehicle if they do not know how much the vehicle will cost, particularly if the car is a used or vintage car which will require an independent valuation. 

How to speed up the car finance approval process

If you’re ready to get on the road, there are a few things you can do to speed up the process of approving your car loan.

Know the eligibility criteria

All lenders will have their own set of eligibility requirements. While this will usually be to verify your age, income and residency status, some lenders will have more specific criteria. Make yourself familiar with the eligibility criteria of the lender you are applying through to avoid submitting an unnecessary application. For example, if you know you have bad credit, apply through an alternative lender that can be more flexible with their credit requirements, like Jacaranda Finance, instead of through a traditional lender.

Apply as early in the day as possible

By applying early in the day, you give the lender enough time to process your application as fast as possible. If it is a lender that offers same-day loan outcomes, you are most likely to receive this outcome the earlier you apply.

Have all of your supporting documents ready

To avoid the lender needing to chase you for documents and delay the processing of your application, have all of the documents needed ready when you apply. In this way, the lender is not waiting on you and can process the application quickly.

Be ready to submit additional documents

If the lender requires additional documents, be available to supply this documentation. The faster you do this, the faster the lender can process your request. 

Different types of car financing

Different car finance options will accompany different processing times and documentation required to approve your application. The different ways you can consider to finance your vehicle will be outlined below.

Secured car loans

Secured car loans are a type of loan in which an asset is used to secure the loan. This is usually in the form of the car that is being purchased but can be another vehicle like a car, motorbike or caravan etc. These accompany lower interest rates than unsecured car loans that do not require this collateral, as the lender has more security that you will be able to repay the loan. Jacaranda Finance offers secured car loans from $5,000 to $35,000 for both new and used cars.

Chattel mortgage

A chattel mortgage is used to finance a car that will primarily be used for business purposes (<50%). Chattel mortgages are also secured loans, so they often accompany low-interest rates and flexible repayment terms. There are a number of differences between chattel mortgages and consumer car loans, the main difference being the use of the vehicle.

Novated lease

A novated lease is an agreement between you, your employer and the lender. The agreement functions as you, the employee, sacrifice part of your salary to lease your car. This can be used to lower your taxable income and, at the end of the lease, you can choose to purchase the car.

Car lease

Car leases are formal agreements in which you hire a car for a set period of time with monthly repayments. Since you do not own the vehicle, you don’t need to pay insurance, registration, or any maintenance expenses. However, your payments are not going towards owning the vehicle so, at the end of your lease, you will need to hand the car back to the dealer. Otherwise, you can pay out the residual value and own the car. 

Bad credit car loans

Bad credit car loans function similarly to secured car loans, but they usually accompany a higher interest rate. This is because the borrower is considered more ‘risky’ due to their credit score. Jacaranda Finance offers bad credit car loans 100% online up to $35,000 to eligible Australians. 


Jacaranda Team

Written by Jacaranda Team

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