How Long Does it Take to Get Approved for a Car Loan from a Dealership?

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Going to the dealership to buy a car can be an exciting experience. You might have it all pictured in your mind: You get there, pick out the vehicle you want, and exit the dealership driving it—all in a matter of hours. While this is undoubtedly an ideal situation, it’s not always possible, especially if you’re planning on applying for a loan at your dealership. 

How Do Dealerships Finance a Loan?

The short answer is they don’t. While your dealership may lure you in with easy financing options and promises, the truth is that the finances are not coming directly from them. The dealership fills out a credit application on your behalf and sends it out to different lenders so that you can later pick the best offer.  

When Will I Know If I Get Approved?

If you go to the car dealership and apply for a loan there, the time in which you will get an answer back can vary. Getting approved for a loan can take anywhere between a few hours to a few days. It will depend on factors such as the state of your credit, the documents you submit, and the type of car you’re looking to buy. 
However, as you might have guessed, your credit will [always be the most influential factor]( Your credit is what tells financial institutions whether or not you can be trusted with paying off a debt or a loan. So, in some cases, whenever someone with bad credit applies for a car loan, the dealership’s business manager might take longer submitting the application because they will try to structure the deal and make it look more attractive on paper. 
Additionally, the lender may also ask for additional documentation when someone with bad credit is applying; this is to feel secure in their decision before communicating a verdict. This can also extend the approval process for the loan. 

Tips to Speed Up Your Application Process

While one of the perks of applying for a loan through a dealership is that they walk you through the whole process, it is still nice to know the best practices to make your loan application as smooth as possible. 
Submit all the required documents. Lenders won’t ignore a missing form. They will come back and ask for it, which, of course, will mean that at least a couple of days will be wasted in the process. 
Don’t apply late in the day. One of the reasons why some people can get same-day approval for loans is the time at which they apply. Banks work the usual business hours, and if you apply close to the end of the day or during the weekend, you will have to wait until they’re open once again so that they can look at your application. 
Provide detailed information about the car you want to buy. Some lenders have restrictions on used vehicles and mileage. The fastest your car dealership sends the information to the lender, the sooner you’ll be able to know if you got approved or not. 
Knowing when you qualify. Not everyone is qualified to apply for a loan in the first place, and applying for a loan when you don’t meet the standards will simply be a waste of time. So, make sure to get familiar with lenders’ requirements before applying for a car loan. 

Applying for a Loan at the Dealership vs. at a Bank

There are upsides to applying for a loan through a dealership. Dealers are usually faster than banks, and they do all the work for you. However, you might be paying a fee for these services. In some cases, while dealers can get low interest rates for your loan, they will negotiate based on a slightly higher one with you as compensation for handling the loan process. 
While applying at a bank will certainly take longer and require you to do most of the work, it might still be a good idea to go to the dealer while being pre-approved since this can give you a chance to negotiate a better rate.

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