How To Get Pre-Approved For A Car Loan?

Wouldn’t it be perfect if you could make a cash payment while purchasing a car and would never have to bother about your EMIs or debt? You would approach the salesperson with more aggression. Negotiating the car’s price would be easier as the latter knows there is a strong probability that you would buy your four-wheeler from another dealer in an instant if you don’t get a fair price. However, that remains a dream for most of you. In reality, only a handful can actually save that amount of cash to make a full payment for a car. The rest has to look out for car loans. But you have no idea if the loan you are taking is the best for you or not. So, the best way is to get pre-approved for a car loan. How? Find out.

Where Can You Get Pre-Approval?

You can get auto loans from traditional banks, such as wells Fargo, Chase, and Bank of America, credit unions such as Boeing Employees Credit Union, or an online lender like Up2Drive or CapitalOne. The interest rates, as well as the requirements, will be different from one lender to another. Therefore, you must look around for the best rates and easy requirements. Aside from getting finance for used cars and new cars, you can also get car refinancing from certain lenders.

Eligibility Requirements

You will come across a lot of advertisements on websites featuring interest rates for those individuals who have an impressive credit score. In case you don’t have good credit, it doesn’t mean that you have no options left. Consumers can receive loans from SpringboardAuto and myAutoloan, even if they have poor credit scores. Though the interest rates will actually be on the higher side, you will at least get an idea of what you can afford. You can have a look at the list of online lenders that deal with people without a good credit score. If you don’t know where your credit score stands, it is high time that you check it out. Then you can have a proper idea of what you can expect when you are looking for a loan.

What to do with a Pre-Approved Loan?

After you have got approval, the lender will offer you the total amount, as well as the interest rate for the approved loan. What you do with that amount will depend on whether you opt for a used car or a new car. If you have already decided which car to buy, you will negotiate with the salesperson regarding the price of it. Once it’s done, the dealer will contact your lender for the payment. You will also find out that some lenders already have a list of car dealers that they have approved. Therefore, do confirm that the dealership you are shopping with is included on the list.

If you still haven’t decided which car you want to buy, you will get a blank check from several lenders that wouldn’t be related to a particular car or dealership. Truly speaking, the check isn’t as blank as you might think. The maximum amount will be the loan amount for which you have been approved. Taking this check along, you can contact as many dealerships you want and take as many cars on a test drive as you please before finally deciding on which one to purchase. After you are done with it, give the check to the dealer and they will contact your lender to make the necessary arrangements.

Why Should You Get Pre-Approved?

When you receive pre-approval, you will know how much you are liable to spend. You would also have to keep in mind that there are taxes and other fees to pay for. Therefore, you know that you have to stick to your budget anyhow. Getting pre-approval also lets you compare one interest rate with another. You can’t guarantee that you will get the best rate after being pre-approved. However, you can have a baseline that will help you compare different interest rates.

Also, a pre-approval helps in negotiation. It’s almost like having a check in your pocket. It also cuts down the risk regarding spot delivery complications. Last but not the least, getting pre-approved saves time and helps you get rid of the hassles that one might face at the finance and insurance office.

Check your credit score. That’s important. Check the different interest rates that lenders are offering before you take a step forward.