If you are considering instant auto loans as a finance option for your next car purchase, there are several things you will need to know about these types of loans. While instant auto loans might seem to be quick and convenient, they are hardly ever truly ‘instant’ and may be more expensive than other types of car loans.
In most cases, an instant auto loan will never result in an instant approval. If you have good or excellent credit, you may receive a real approval in an hour or so. However, if you have bad or marginal credit, you may have to wait for up to two days – until a credit manager can physically review your application and credit history – before you receive a lending decision. As you can see, this is a far cry from the instant decision you might expect with a loan termed as such. Also, instant auto loans usually offer no faster decision, regarding an approval, than do other types of conventional auto loan applications.
Instant auto loans are usually more expensive than other types of car loans. In exchange for accepting a loan application based on a limited amount of information, most lenders that provide instant auto loans will usually charge higher interest rates than more conventional car loan lenders. Also, instant auto loan lenders will almost always charge higher fees and penalties. Often, there are higher application fees, documentation fees and other processing fees than with conventional car loans.
If you are able to apply for more conventional car loans – whether online or at bank or car dealership – you should consider those types of loans before choosing an instant auto loan. You will receive a lending decision in about the same amount of time and probably save a lot of money in the process.