How long does car finance approval take?

Daniel Timblick, Senior Credit Risk Analyst, Friday, 23 February 2024
Updated: Friday, 23 February 2024

The approval process can be complicated if you’ve never applied for car finance before. But don’t worry, it’s much more straightforward than you might think.

To dispel myths, we put this guide together. Here, we explore the car finance approval process to explain how long it can take to get approval and what a car finance company is looking for when you apply.

How long does it take for car finance to be approved?

The approval process can be complicated if you’ve never applied for car finance before. But don’t worry, it’s much more straightforward than you might think.

To dispel myths, we put this guide together. Here, we explore the car finance approval process to explain how long it can take to get approval and what a car finance company is looking for when you apply.

How long does it take for car finance to be approved?

The car finance application process depends on several factors, like the type of lender you want to borrow from and your circumstances.

When you make an application with us, you’ll get an immediate decision on whether we can offer you finance. We use a soft search at the point of application, which does not impact your credit score.

If you are approved or approved in principle, you’ll be shown what your agreement could look like. An expert from our team will get in touch to help guide you through the process.

For those approved in principle, it is usually because we need some extra documents to support your application. Our team will be able to help you through this process.

Once these checks are passed and you’ve found the car you want to purchase, we’ll run a hard credit check when we create contracts for you to sign. We will then pay out the finance to the dealership within 3 working days. When this is all finalised, the car will be yours to drive away.

Find out more about our application process.

Moneybarn vehicle finance application process

The car finance application process depends on several factors, like the type of lender you want to borrow from and your circumstances.

When you make an application with us, you’ll get an immediate decision on whether we can offer you finance. We use a soft search at the point of application, which does not impact your credit score.

If you are approved or approved in principle, you’ll be shown what your agreement could look like. An expert from our team will get in touch to help guide you through the process.

For those approved in principle, it is usually because we need some extra documents to support your application. Our team will be able to help you through this process.

Once these checks are passed and you’ve found the car you want to purchase, we’ll run a hard credit check when we create contracts for you to sign. We will then pay out the finance to the dealership within 3 working days. When this is all finalised, the car will be yours to drive away.

Moneybarn vehicle finance application process

Find out more about our application process.

What can slow down getting my application approved?

If you think your car finance application is taking longer than expected, it could be due to several reasons, including:

One

The verification process

To ensure all of your information is correct, lenders will need to verify details like your income, employment status and address, which can take time.

Two

Application checks

Lenders must ensure that any finance they offer is affordable and suitable for your circumstances. A responsible lender will make a range of checks, including a credit check, to assess your eligibility.

Three

Additional information

To support your application, you may have to provide additional information, like proof of income and identification. Also, self-employed people or those in receipt of benefits may need to provide documents proving their income or benefits.

What can slow down getting my application approved?

If you think your car finance application is taking longer than expected, it could be due to several reasons, including:

One

The verification process

To ensure all of your information is correct, lenders will need to verify details like your income, employment status and address, which can take time.

Two

Application checks

Lenders must ensure that any finance they offer is affordable and suitable for your circumstances. A responsible lender will make a range of checks, including a credit check, to assess your eligibility.

Three

Additional information

To support your application, you may have to provide additional information, like proof of income and identification. Also, self-employed people or those in receipt of benefits may need to provide documents proving their income or benefits.

Can you speed up the car finance approval process?

While the factors that may slow down your application might not be in your hands, there are things you can do that might help streamline the process, such as:

One

Supply the correct information

Providing inaccurate information on your application can lead to delays, so double-check your application to ensure the details you provide are accurate and up to date.

Two

Prepare documents in advance

At the start of the car finance approval process, you should compile extra documentation, like bank statements, so you’re prepared if the lender requests this information. Find out what documents you need to apply for car finance with our guide.

Three

Respond quickly

Respond promptly to avoid delays if the car finance provider requires additional information.

Can you speed up the car finance approval process?

While the factors that may slow down your application might not be in your hands, there are things you can do that might help streamline the process, such as:

One

Supply the correct information

Providing inaccurate information on your application can lead to delays, so double-check your application to ensure the details you provide are accurate and up to date.

Two

Prepare documents in advance

At the start of the car finance approval process, you should compile extra documentation, like bank statements, so you’re prepared if the lender requests this information. Find out what documents you need to apply for car finance with our guide.

Three

Respond quickly

Respond promptly to avoid delays if the car finance provider requires additional information.

Although you may need to get car finance approval quickly, it’s important you don’t rush the process and take time to understand the terms and conditions of the agreement before accepting it.

What checks are done for car finance?

During the car finance process, two types of credit checks take place: hard checks and soft checks. We use a soft check at the point of application, which doesn’t affect your credit score. We only use a hard check when you’ve decided to enter into an agreement with us, and contracts are drawn up for you to sign.

Some lenders may use a hard check as soon as you ask for a quote. That’s why it’s important to research each lender and fully understand their terms before making an application.

Hard credit checks

By performing a hard search on your credit file, lenders get a detailed look at your financial history to help them determine whether or not you are eligible for credit. Hard credit checks include:

  • Personal details, like your name, date of birth and current and previous addresses
  • Whether you’re on the electoral roll
  • Information relating to outstanding credit, like loans, credit cards and other debts you owe, e.g. utility bills.
  • Your current account provider and information about overdrafts
  • Whether you’re linked to anyone financially, e.g. holding shared bank accounts or mortgages
  • Public records, such as bankruptcies, house repossessions, and County Court Judgments (CCJs)
  • If you’ve committed or been a victim of fraud

Soft credit checks

A soft credit check will give car finance providers an overview of your borrowing history. This doesn’t affect your score and will only be visible to you when you check your credit report.

Soft checks have no impact on future credit applications. Want to read more? Explore our blog for an in-depth look into the checks that are done for car finance.

Is it hard to get accepted for car finance?

Whether or not you can get car finance will vary depending on your circumstances. Getting approved for car finance is relatively straightforward for people with a good credit history and a stable income. Because they can be seen as lower risk, they may find it easier to get credit and have more options to choose from.

Being approved for car finance can be more challenging if you have a less-than-perfect credit history. Finance providers might consider you a higher risk, which can lead to stricter approval criteria and higher interest rates. In these situations, it can be tricky to find a lender who accepts people with bad credit.

Read our full guide on how hard it is to get approved for car finance for more information.

Can you get approved for car finance with bad credit?

We specialise in bad credit car finance. If you have poor credit or have been rejected for credit in the past, we could help you onto a better road ahead.

We have over 30 years of experience helping people up and down the UK. We could help you, even if you:

See what your repayments could look like with our car finance calculator.

Tips for applying for car finance

There are some things you could do that may increase your chances of getting car finance:

One

Save a deposit

Although it is possible to get car finance without a deposit, putting down a deposit can reduce the amount of interest you pay in the long run. It can also help when getting a car that’s slightly outside your affordability, as it helps to reduce the monthly payments.

Two

Shop around

Different providers have different lending criteria and interest rates. Exploring options from various lenders can help you find a suitable deal.

Three

Improve your credit score

Take steps to improve your credit score by paying off outstanding debts, making timely payments, and correcting any errors on your credit report.

Although you may need to get car finance approval quickly, it’s important you don’t rush the process and take time to understand the terms and conditions of the agreement before accepting it.

What checks are done for car finance?

During the car finance process, two types of credit checks take place: hard checks and soft checks. We use a soft check at the point of application, which doesn’t affect your credit score. We only use a hard check when you’ve decided to enter into an agreement with us, and contracts are drawn up for you to sign.

Some lenders may use a hard check as soon as you ask for a quote. That’s why it’s important to research each lender and fully understand their terms before making an application.

Hard credit checks

By performing a hard search on your credit file, lenders get a detailed look at your financial history to help them determine whether or not you are eligible for credit. Hard credit checks include:

  • Personal details, like your name, date of birth and current and previous addresses
  • Whether you’re on the electoral roll
  • Information relating to outstanding credit, like loans, credit cards and other debts you owe, e.g. utility bills.
  • Your current account provider and information about overdrafts
  • Whether you’re linked to anyone financially, e.g. holding shared bank accounts or mortgages
  • Public records, such as bankruptcies, house repossessions, and County Court Judgments (CCJs)
  • If you’ve committed or been a victim of fraud

Soft credit checks

A soft credit check will give car finance providers an overview of your borrowing history. This doesn’t affect your score and will only be visible to you when you check your credit report.

Soft checks have no impact on future credit applications. Want to read more? Explore our blog for an in-depth look into the checks that are done for car finance.

Is it hard to get accepted for car finance?

Whether or not you can get car finance will vary depending on your circumstances. Getting approved for car finance is relatively straightforward for people with a good credit history and a stable income. Because they can be seen as lower risk, they may find it easier to get credit and have more options to choose from.

Being approved for car finance can be more challenging if you have a less-than-perfect credit history. Finance providers might consider you a higher risk, which can lead to stricter approval criteria and higher interest rates. In these situations, it can be tricky to find a lender who accepts people with bad credit.

Read our full guide on how hard it is to get approved for car finance for more information.

Can you get approved for car finance with bad credit?

We specialise in bad credit car finance. If you have poor credit or have been rejected for credit in the past, we could help you onto a better road ahead.

We have over 30 years of experience helping people up and down the UK. We could help you, even if you:

See what your repayments could look like with our car finance calculator.

Tips for applying for car finance

There are some things you could do that may increase your chances of getting car finance:

One

Save a deposit

Although it is possible to get car finance without a deposit, putting down a deposit can reduce the amount of interest you pay in the long run. It can also help when getting a car that’s slightly outside your affordability, as it helps to reduce the monthly payments.

Two

Shop around

Different providers have different lending criteria and interest rates. Exploring options from various lenders can help you find a suitable deal.

Three

Improve your credit score

Take steps to improve your credit score by paying off outstanding debts, making timely payments, and correcting any errors on your credit report.

FAQs about car finance approvals

Here’s what happens after you get approved for car finance with Moneybarn:

  1. After being approved, you can browse vehicles within your budget using our vehicle finder tool in partnership with Exchange & Mart. If you can’t find what you’re looking for, an expert from our Direct Sales team will be able to help.
  2. Our friendly team will guide you through the process, helping you provide proof of identity and income documents. If you’ve been approved in principle, our experts will help guide you through any affordability checks.
  3. Once you’ve found the vehicle you’d like to finance, as long as it is within our lending criteria, we’ll provide you with a full quote. If you are happy with this, we’ll prepare your contract. It’s at this point that we make a hard credit search to confirm your application.
  4. When we receive a copy of your signed contract, we’ll transfer the funds to the dealership. Once this is done, we’ll let you know, so you can collect your new vehicle!
  5. The car will be registered in your name, and you’ll receive the necessary documents. You must arrange comprehensive insurance with an excess of no more than £500. You will also be responsible for servicing the vehicle and arranging MOTs.
  6. Your car finance agreement will specify the monthly payment amount and due date. Making these payments on time is crucial to maintaining a good credit history. Failure to make car finance payments can result in damage to your credit score and even repossession of the vehicle.

You might be refused car finance in the UK for several reasons, including:

  1. Low or no credit score: if your credit score is too low, it can indicate a higher risk for the lender, making it difficult to secure car finance. Likewise, if you have no credit history, lenders might find it challenging to assess your creditworthiness, making it harder to get approved.
  2. Affordability: your application might be denied if lenders believe that, after carrying out affordability checks, the loan amount is too high for your income. Similarly, lenders might worry about your ability to handle additional financial obligations if you already have a significant amount of debt compared to your income.
  3. Inconsistent income: if you have a history of changing jobs frequently, are currently unemployed, or are self-employed, it could make it difficult to get approved.
  4. Incomplete or inaccurate information: providing insufficient or incorrect information on your application can lead to rejection.

Generally, a higher credit score increases your chances of approval and may offer you better interest rates and terms.

Most lenders prefer applicants with good to excellent credit scores; however, some lenders also work with people with fair or average credit scores. Additionally, some specialised lenders work with people with poor credit as well.

You can check your credit score online by registering with any of the three major credit reference agencies (CRAs) in the UK. These are Experian, Equifax, and TransUnion.

FAQs about car finance approvals

Here’s what happens after you get approved for car finance with Moneybarn:

  1. After being approved, you can browse vehicles within your budget using our vehicle finder tool in partnership with Exchange & Mart. If you can’t find what you’re looking for, an expert from our Direct Sales team will be able to help.
  2. Our friendly team will guide you through the process, helping you provide proof of identity and income documents. If you’ve been approved in principle, our experts will help guide you through any affordability checks.
  3. Once you’ve found the vehicle you’d like to finance, as long as it is within our lending criteria, we’ll provide you with a full quote. If you are happy with this, we’ll prepare your contract. It’s at this point that we make a hard credit search to confirm your application.
  4. When we receive a copy of your signed contract, we’ll transfer the funds to the dealership. Once this is done, we’ll let you know, so you can collect your new vehicle!
  5. The car will be registered in your name, and you’ll receive the necessary documents. You must arrange comprehensive insurance with an excess of no more than £500. You will also be responsible for servicing the vehicle and arranging MOTs.
  6. Your car finance agreement will specify the monthly payment amount and due date. Making these payments on time is crucial to maintaining a good credit history. Failure to make car finance payments can result in damage to your credit score and even repossession of the vehicle.

You might be refused car finance in the UK for several reasons, including:

  1. Low or no credit score: if your credit score is too low, it can indicate a higher risk for the lender, making it difficult to secure car finance. Likewise, if you have no credit history, lenders might find it challenging to assess your creditworthiness, making it harder to get approved.
  2. Affordability: your application might be denied if lenders believe that, after carrying out affordability checks, the loan amount is too high for your income. Similarly, lenders might worry about your ability to handle additional financial obligations if you already have a significant amount of debt compared to your income.
  3. Inconsistent income: if you have a history of changing jobs frequently, are currently unemployed, or are self-employed, it could make it difficult to get approved.
  4. Incomplete or inaccurate information: providing insufficient or incorrect information on your application can lead to rejection.

Generally, a higher credit score increases your chances of approval and may offer you better interest rates and terms.

Most lenders prefer applicants with good to excellent credit scores; however, some lenders also work with people with fair or average credit scores. Additionally, some specialised lenders work with people with poor credit as well.

You can check your credit score online by registering with any of the three major credit reference agencies (CRAs) in the UK. These are Experian, Equifax, and TransUnion.

 
Daniel Timblick, Senior Credit Risk Analyst
Bringing you guides that simplify the world of credit and answer common vehicle finance questions.
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