Instant auto loan approval is not impossible to obtain as a borrower with bad credit, but it is usually easier to obtain when you are in a good credit position. If you’re struggling with credit and wondering how to get instant approval, also known as pre-approval, you need to know where to start your journey and what to expect along the way.
What is instant auto loan approval?
Instant approval typically leaves you waiting a few hours, instead of days, to hear about a car loan decision. But not all lenders offer it, and not all borrowers qualify for it.
When you get an instant approval auto loan, you do it with a direct lender, such as a bank, credit union, or online lender. Getting pre-approved essentially turns you into a cash buyer, giving you bargaining power that you might not otherwise have had.
Get instant auto loan approval
Direct lenders who provide instant approval loans generally base auto loan approvals on credit scores alone. Although each lender has their own requirements, you can start to run into problems if your credit score is below around 660 – which is the general line between good and bad credit.
However, if you are a member of a credit union, with an account in good standing, you may have a chance to get pre-approved. Since credit unions are owned by their members, they tend to have slightly less stringent requirements and also provide members with a wide range of loan options. An online lender may also be more inclined to work with a borrower who has a somewhat poor credit rating.
If you are able to get the instant approval that you are looking for, you usually receive a check or promissory note for your loan amount, which you can then use as a cash limit for your next loan. Pre-approval gives you the freedom to go to any dealer or private seller you choose.
You then repay your car loan to the bank. Because you have a fixed amount of money to work with, you have more freedom to personalize your car buying experience. The total loan amount should just match your borrowing limit.
What if I don’t qualify for instant approval?
If you don’t qualify for an instant approval auto loan, don’t worry. There are many lenders who work specifically with borrowers struggling with credit problems. These lenders are called subprime lenders, and they are third party lenders who are registered with special finance brokers, not banks or credit unions.
Subprime lenders are often referred to as bad credit lenders or indirect lenders, and you never sit down with them in person to figure out your loan details. Instead, a special finance manager at a dealership acts as an intermediary.
Since you primarily work with the dealership, you need to be ready for your car loan as soon as you walk into the showroom. If you’re not ready to start, you run the risk of having to make multiple trips to the dealership to get a car loan deal. You can avoid all the extra hassle by bringing some documents with you when you start the process.
Typically, subprime lenders need you to bring documentation proving that you have the stability, ability, and willingness to pay off a car loan. This means providing your last 30 days of pay stubs, utility bills, or computer generated bank statements, as well as a phone bill in your name as proof that you can meet loan requirements.
While this is not necessarily necessary to be approved, most bad credit lenders also require that you have a valid driver’s license, provide personal references, and make a down payment of at least $ 1,000 or more. 10% of the selling price of a vehicle.
Find a dealership for your next car loan
While not everyone can qualify for instant auto loan approval through a direct lender, many borrowers may find it easier to get the car loan they are looking for when working with a lender in Canada. risk. These lenders aren’t available everywhere, and looking when you don’t know where to start can be frustrating. With Auto Express Credit on your side, it doesn’t have to be.
We’ve been connecting borrowers in need with qualified dealers for over 20 years, and we’re also keen to help you find a local dealer to work with. The process is quick, free, and doesn’t require you to purchase, so what are you waiting for? Fill out our online auto loan application form today and we’ll do our best to match you!