When you need a fast auto loan, there are options to get the ball moving more quickly, whether your loan is from your local dealership or an online lender. You’ve found the car of your dreams, and you can hardly wait to drive it home. But first, you have to square away your financing, and that can take forever — or will it?
How to Get Approved for an Auto Loan
These days, auto loan pre-qualification is pretty simple. You fill out a form online with some basic information like your income and Social Security number, and then you’ll get a reply in a few minutes to a few hours. That’s a quite fast auto loan process.
Pre-qualifying for a loan isn’t set in stone. The lender is only doing a “soft pull” on your credit to get basic facts, and they could adjust the offer later. You may receive a range of rates that you could qualify for, but you’ll still get a good idea of what your loan amount and monthly payments will be.
Once you find the vehicle you’ll be buying, the lender can do a final approval on your loan and finalize the terms and rate. Pre-approval is different from pre-qualification — it’s more solid, and you’re more likely to get the offered rate.
If you choose to get dealership financing, the dealer will get quotes from their lender and present you with financing options when you purchase your vehicle. By the time you get your financing offers, you may be tired and have your heart set on a vehicle, so you’re more likely to settle for whatever rate you can get on the spot. By doing some work in advance and getting pre-approved for a loan, you’ll be in a better position to work with the dealer, even if you do ultimately decide to accept their finance package. You’ll also have a better concept of whether the terms are good on the dealership’s loan offer. So how can you get a fast auto loan?
What to Do to Get a Fast Auto Loan
It’s true that by being prepared to apply for an auto loan, you can shorten the time it takes to get your financing and get a fast auto loan. You can take steps to make the approval process go quickly and get a fast auto loan, especially if you don’t yet have a specific vehicle selected.
- Check your credit report. By looking ahead of time, you can see if there are any nasty surprises or incorrect information that could be costing you a chance at a loan or better loan rates. Many financial advisers recommend enrolling in a credit report service — many are free — to regularly review your report and check your score. It may be necessary to do some work to bump up your score. By checking with plenty of time before you’ll be applying for a loan, you can qualify for the best possible loan terms. In fact, you could save hundreds or even thousands just by having a better credit score and getting a better annual percentage rate (APR).
- Get multiple quotes for an auto loan. Call your local credit union, but also look into some of the online lenders that are able to keep both their overhead and rates low. Make sure you’re comparing the same loan terms and APR, even if the lender presents the information as one monthly payment. Some lenders may add more fees or charges than others. It’s also wise to make sure you can pay off the loan at any time without penalty, in case you need to trade in the vehicle or simply come into some cash.
- Be pre-approved for your loan. Once you secure a lender, you can get pre-approval for your loan that you can take vehicle shopping with you. This makes negotiating at the dealer a bit easier and takes the worry away from qualifying for dealer financing. Just because you’re pre-approved doesn’t mean you have to take the loan. You can still have the dealership present financing offers. Sometimes the dealer actually provides a lower rate.
What if your Credit is Bad
If your credit score is lacking, you may have to be more patient than someone with a good to great FICO number. You are less likely to qualify for an auto loan from a traditional bank or even a credit union. However, you may have better luck with rates if you use an online lender who specializes in financing those with lower credit ratings.
You should still take the time to get multiple quotes, because you may be surprised about the rate you could qualify for.
When Will You Get the Funds
While pre-approval is fast, sometimes it will take a few days for a final check to be prepared and delivered. Dealerships are the fastest option: they can usually get you on your way the same day. However, many online lenders will arrange fast delivery on a check so you can get your vehicle within one business day. Traditional banks and credit unions may be initially quick, but they often take the longest to finalize your approval and get you the funds you need to be able to drive your new car or truck away.