How long does finance approval take in Australia?


Loan approval time varies from loan to lender. Some finance products, such as a credit card, can be approved within minutes on the very same business day. However, finance products such as home loan applications can take between 3 - 5 business days. 

Understanding how long finance approval takes in Australia can help you to navigate the requirements of the bank or lending institute, avoiding common mistakes in the application process. So, where do you start?

This is where we can help. Increase your knowledge of personal finance so you can manage your money better. We can help you find out how long finance approval takes in Australia,

Let’s get to the following commonly asked questions:

  • What are the different types of loans in Australia?
  • What factors affect the time it takes to get finance approval?
  • How to speed up the process of getting finance approval?
  • What are the risks of taking out a loan?

Q1. What are the different types of loans in Australia?

Here are the different loan types available in Australia:

Personal loans: Personal loans are fixed-rate loan products where the lender will borrow you a set amount of money. The loan amount could be anywhere from a few hundred dollars to thousands of dollars, with interest added to your monthly loan rate repayments. 

A personal loan is unsecured, so you do not need any collateral, such as a property, to secure the loan. You will face a credit check, however, with a higher credit score, increasing your chance of finance approval.

Car loans: If you need finance to purchase a car, the car loan approval process could take just one day. You could sign your loan contract and drive away with your new car within no time at all as long as the information provided meets the eligibility criteria. You will be charged interest to secure a car loan, borrowing the exact value of the car you wish to purchase.

Home loans: The home loan process can be long and sometimes tedious. Home loan pre-approval can be achieved within 1 to 3 days, although you could be waiting for up to 6 weeks in home loan approval time for loan completion. 

In between these six weeks, you will need to obtain a property valuation and secure lender mortgage insurance, if applicable. Home loan rates vary according to your lender and whether you have a fixed rate or variable rate deal.

Business loans: Business loans are products to start up a new business or to help support a current business. The approval process is similar to any loan, with finance approval and success varying according to your credit score, taking business banking into consideration.

A bad credit score limits your chances of securing finance, although some lending specialists do consider bad credit loan application forms.

Secured loans: This loan is a finance product secured on collateral such as a property. The value of the asset on the property market is important, with reasonable steps taken to approve a realistic and accurate valuation. However, if you default payments on a secured loan, the lender can repossess the property. 

Home equity loans: These loans allow you to borrow the equity in your property or property investing portfolio. The value of the property is reasonably required, along with your bank account bank statements and borrowing power assessment. 

If the approval process succeeds, you can access cash from your property and have zero monthly repayments. The lender will take the money owed to them when you sell your home or after you have died. Your wills and estate will pay the lender as part of your deceased estate's package. 

Or, you could instigate a redraw facility to access money from the equity in your home when you need to. Enjoy your retirement to the fullest!

Offset accounts: These are savings accounts that allow you to offset the balance in the account against the home loan approved previously. The owner-occupier can enjoy reduced interest rates on their home loan-obtained finance, yet they still have access to money in the offset account.

To assess your potential savings for different offset accounts, use loan calculators to find the best deal for your circumstances. The repayment calculator will give you a good idea of how much you could save in interest.

Payday loans: These are short-term loans that you must pay back within a few months. You are charged interest every day that you owe the lender money, with high-interest rates and default charges applicable. However, conditions apply, and the payday loan contract is subject to providing bank account details so the lender can automatically deduct monthly repayments from your account.

Important: Until your finance has been approved, you have the time and the ability to refuse the finance clauses. Your financial situation will not change, but if you are not comfortable with special conditions, do not feel as though you have to sign and return the loan documents.

Q2. How to speed up the process of getting finance approval?

If you have a good credit score, you could achieve a faster time when obtaining approval for finance. The duration for obtained finance approval will decrease as the lender will view your application favourably, determining that you are a low-risk borrower.

The average Australian has an Equifax credit score of 846 out of a possible 1,200 points. A credit score of 846 falls into the ‘very good’ credit rating, meaning that the average Australian is financially responsible with a very good credit history.

Image: Equifax

Equifax credit scores vary across Australian regions, with the average resident of North Sydney and Hornsby scoring a credit rating of 926, an ‘excellent’ rating.

Residents of outback Queensland score less favourably with Equifax, reaching an average credit score of 719. However, an Equifax score of 719 is still considered ‘good’.

Note: Whatever your current credit score, you can build it to a higher rating over time. Simply ensure that you pay your debts on time and in full, ensuring that zero defaults occur. You should also try to pay off your debts as much as possible to decrease your debt level, especially if you want to own your own home one day.

Q3. What are the factors affecting the time it takes to get finance approval?

Here are the main factors affecting the time it takes to get finance approval in Australia:

The type of loan you are applying for

The type of loan you have applied for will affect the approval date, requiring extra time for approval of the loan in some instances. For example, if applying for a payday loan, you could receive payment via bank transfer within minutes. 

However, a home loan contract takes much longer for the home loan approval process to reach completion. It could take six weeks for your home loan application process to achieve all the necessary steps in between so you can obtain your home loan product.

Your credit score

The comparison rates offered depend on your credit score, with higher interest rates offered to those with bad credit. A low credit rating will also mean that your loan approval time will take longer than usual as the lender will decide whether or not to provide you with the finance product.

If you have a high credit score and an unblemished credit history, you could expect lower interest rates and a much faster approval time.

The amount of money you are borrowing

The higher the amount of money you are borrowing, the longer the approval time will take. This is because the lender will need to decide whether to issue high amounts of finance to you, requiring numerous steps to be taken by their stakeholders.

The lender’s policies

Each lender will have their own loan guides, finance conditions, and information documents to abide by before issuing conditional approvals. Various checks will be required, such as a verification of identity, before the loan pre-approval is unconditionally approved.

Ensure that your lender has the necessary Australian Credit Licence, however, and the capabilities required to obtain approval.

The time of year

If your loan is not approved quickly, it could be due to the time of the year. For example, a mortgage application requires input from numerous individuals. If employees are taking holidays during that time of year, there could be a delay in fulfilling your application.

Q4. What are the risks of taking out a loan?

The main risk of taking out a loan is the high interest rates you will need to pay. Particularly if you have a bad credit score, you could be charged high interest, making your monthly repayments higher than expected.

As a result, you could find that you cannot pay the loan repayments, leading the lender to terminate the contract, subject to terms and conditions. Fees and charges could be added to your account, leaving you in serious debt.

If you default on repayments even once, your credit score will be damaged. This could lead to further difficulties in the future if you want to seek home lending for a residential property or investment home loans for investment properties.

Credit rating

Looking after your credit rating is vital for your future financial security, particularly if you want a home loan or mortgage in the future. However, obtaining credit is not a negative action. If you take out credit cards, a car loan or a small personal loan, simply ensure that you always meet the repayments and never default.


A good credit history is also important when you apply to take out insurance, such as formally approved home insurance or life insurance. Depending on the coverage you want, you could be refused insurance in some circumstances.

Summing up

Finance approval can take a long time in Australia if you are seeking mortgages and securities or large secured or unsecured loans. Home buyers, in particular, require input from mortgage brokers, estate agents, solicitors, and lenders to organise their home-buying journey, facing a wait of six months before moving into their new home. Stamp duty payments and other information subject to finance clause requirements must be completed during this time.

However, if you are looking for a payday loan, you could receive approval and a money transfer the very same day. With such loans, repayments are higher than normal, and the loan terms are much shorter.

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Disclaimer: The author is not a financial advisor and the information provided is general in nature and was prepared for information purposes only. This article should not be considered to constitute financial advice. Accordingly, reliance should not be placed on this article as the basis for making an investment, financial or other decision. This information does not take into account your investment objectives, particular needs, or financial situation.

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