Online Car Loan Approval
Online car loan approval helps you to get the best possible car finance option for you with minimal hassle.
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How we picked theseFinder Score for car loans
To make comparing car loans even easier we came up with the Finder Score. Interest rates, fees and features across 200+ car loan products and 100+ lenders are all weighted and scaled to produce a score out of 10. The higher the score, the more competitive the product.
Key takeaways
- Getting pre-approved online before you shop gives you clear borrowing power and stronger negotiating leverage at the dealership.
- Comparing interest rates, fees and loan terms from different online lenders can save you money and help you secure the best deal.
- Planning for extra costs like taxes, fees and insurance ensures you don't overspend when using your pre-approval amount.
Pre-approved financing gives you better negotiating power, meaning that you are able to get the vehicle you want for potentially less. The online application process usually takes just a few minutes and you get to learn about the approval in a matter minutes, making the process of buying a car much simpler.
How does online car loan approval work?
Paying cash upfront for your car purchase is pretty rare. Most people are forced to finance, which leaves them exposed to high interest rates, fees and sometimes the wrong option to finance their car based on their current financial situation. One way to get around those pitfalls and potentially get a better deal is to opt for online car loan approval, where you get can approved for a loan before you set foot in the dealership.
Online car loan approval is pretty simple, as you just have to fill in an online application that lets you know how much you can borrow based on your income and other factors. Once you are approved, you can then download the paperwork and walk into a dealership to get your new car. There will be no surprises since you will have already known how much you can borrow and will have already shopped around for the best possible deal for you in advance.
What do I need to know about pre-approved car loans?
You'll need to know how much you can borrow, what your repayments will be and have your finances prepared so you can negotiate a better deal.
Generally your pre-approval will last up to 30 days, but if you need to renew your pre-approval, you can do so through your bank for another 30 days.
When choosing a car, make sure you tick off the following:
- Organise your finances so you know how much you have to spend
- Research your vehicle
- Give the car a health check
- Take the vehicle for a test drive
- Ask the deals/buyer questions
- Negotiate for the best prices
How to compare car loans
Comparing online car loans isn't just about chasing the lowest advertised rate. The right loan should match your budget, repayment habits and financial situation. By weighing up interest rates, fees, loan terms and lender requirements, you can avoid costly surprises and lock in a deal that genuinely works for you.
- Interest rates: Lower rates reduce repayments, but always check the comparison rate for a true picture of costs.
- Fees and charges: Watch out for application fees, monthly service fees and early repayment penalties.
- Loan amount: Know how much you can borrow based on your income, credit score and the type of car.
- Loan term: Longer terms mean smaller monthly repayments but higher total interest paid.
- Repayment flexibility: Look for options like extra repayments or redraw facilities to save money long-term.
- Secured vs unsecured: Secured loans often have lower rates, while unsecured loans give you more flexibility.
Pros and cons of online car loans
Pros
- Fast approval.Apply online in minutes and get a quick decision, often the same day.
- Simplified negotiation. Once you get pre-approved for a car loan, you can walk into a dealership with knowledge of how much you can spend and what your monthly payments on the loan will be, saving time on sale pitches and price negotiations.Pre-approval also shows dealers you're serious, giving you similar leverage to a cash buyer.
- Easy comparison. Another advantage with online car loan approval is the ease with which you can compare deals from different lenders. The hassle of searching through the phone book for appropriate lenders or walking around comparing interest rates is removed from car shopping, as you are able to quickly check the deals available online and view approval instantly.
- Convenience: Apply anytime, anywhere - no need for branch visits or paper forms.
- Transparency: Pre-approval makes your budget clear upfront, reducing the risk of surprise costs.
Cons
- May seem complicated. For some customers, pre-approval may seem to complicate car buying, as it can be viewed as one more step in an already long process.
- Credit impact. Multiple applications can leave marks on your credit file.
Things to avoid before applying for the actual loan
The important thing to remember when you are pre-approved for a car loan is that the amount you qualify for does not include the fees and taxes you will have to pay. For instance, if you have been approved for a car loan of $25,000, remember to search for a car that costs a few thousand less to cater for additional loan expenses. Also keep in mind that a lender can sometimes beat the rate you initially get online, so be sure to negotiate further other than just stick to what you get.
Use our car loan calculator to crunch the numbers
How to apply for an online car loan
Applying for an online car loan is straightforward and the process is usually much quicker than applying in person. Here are the key steps:
- Compare lenders: Look at interest rates, fees, loan terms and approval conditions across multiple online lenders.
- Check eligibility: Review the lender's basic requirements such as age, income, residency status and credit history.
- Gather documents: Be ready to provide proof of identity (like a driver's licence or passport), proof of income (recent payslips or bank statements) and details of any existing debts.
- Complete the application form: Fill out the lender's online form with your personal, employment and financial details.
- Submit and wait for approval: Many lenders give you an instant decision, while others may take a day or two to verify your details.
- Review your offer: If approved, check the loan amount, repayment schedule and fees before you accept.
- Finalise the loan: Once you accept, the lender will send through the loan contract and arrange payment so you can purchase your car.
Finder survey: Have Australians in different states ever had a car loan application rejected?
| Response | WA | VIC | SA | QLD | NSW |
|---|---|---|---|---|---|
| No | 66.1% | 64.85% | 66.67% | 72.29% | 67.52% |
| I have never applied for a car loan | 27.12% | 31.06% | 29.33% | 25.11% | 24.22% |
| Yes | 6.78% | 4.1% | 4% | 2.6% | 8.26% |
Source: Finder survey by Pure Profile of 1113 Australians, December 2023
Data for ACT, NT, TAS not shown due to insufficient sample size. Some other states may also be excluded for this reason.
Data for ACT, NT, TAS not shown due to insufficient sample size. Some other states may also be excluded for this reason.
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