How To Get Accepted For a Car Loan In Under 24 Hours

How To Get Accepted For a Car Loan In Under 24 Hours

Posted on June 8, 2023

Applying for a car loan is a simple, painless process but it does involve putting your fate in someone else’s hands. All the plans you made for a new car and all those hopes rest upon an algorithm or an unseen underwriter deciding whether you’re a good bet for a loan or not. If you want to improve your chances of being accepted for a car loan, our auto loan team has a few tips that might help.

Know Your Credit Score & History

The first piece of advice we would offer is to know your current credit score and credit history. Check your credit report for both of these things.

Knowing where you stand now tells you whether you have work to do and how much.

If you don’t need to improve your credit score, you can apply for a car loan with full confidence. If you do need to improve your score, you give yourself time to do it.

Make Sure Your Credit Report is Accurate

While you have your credit report, check it to make sure it’s 100% accurate. Make sure all your financial history is correct, all open credit lines are accurate and there are no mistakes on the report.

If you find a mistake, report it to the organization that made the mistake. If you don’t get anywhere, check out Equifax dispute resolution and TransUnion dispute resolution.

Save for The Down Payment

Lenders love down payments. They show you’re serious about the loan. Lenders like borrowers to have their own money at stake as well as theirs as it minimizes the risk of defaulting.

Down payments also reduce the amount you need to borrow, which can also improve the chances of being accepted.

Pay Pay Down Other Debts

If you have other debt, pay down as much as you reasonably can while also saving for the down payment to minimize credit utilization. The more of your available credit you’re using, the lower the chances of being accepted for the car loan.

Paying down credit cards, paying off other car or personal loans, and getting that utilization below the 30% preferred threshold will improve your chances of getting the loan.

Keep Borrowing Sensibly

Asking for an unaffordable amount if a common reason for loan applications to be refused. Use a car loan calculator, work out how much you can afford and don’t ask for too much.

You’ll need to prove you can afford what you’re asking for so don’t be tempted just to try to see if you can get away with it.

Don't Make Multiple Car Loan Applications

When you’re shopping around for a car loan, only apply for the one you actually want. Use car loan calculators and check out loan prequalification by all means but don’t go for preapproval or apply for a loan until you’re ready.

Every loan application uses a hard inquiry, which is noted on your credit report. Too many in a short amount of time makes lenders suspicious that you’re applying for a lot of money at once.

Some car loan preapprovals also use hard inquiries so be wary of those too.

If you're ready for a car loan in Southern Ontario, we'd love to help! simply fill in the form below to get started.