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What is Car Loan Pre-Approval? (And How to Get Pre-Approved)

Posted on October 19, 2022

 

If you’re looking to buy a new car then you’re probably feeling some stress about getting approval for your loan. After all, it can be soul crushing to go through the long and hard process of finding the car and applying for the loan only for everything to fall apart when the loan is rejected. If that's your fear then pre-approval might just be the safety net you’re looking for. But what is car loan pre-approval? And how do you get it? In this article we’re going to tell you everything you need to know. 

 

What is Car Loan Pre-Approval?

Generally you only apply for a loan when you actually need it, that's why most dealerships will help you find and get a loan on the day you buy the car, with the expectation that you haven’t set that up ahead of time, as mentioned however, this approach has the possible consequence of rejection, especially if you’re shopping for cars that lenders would consider out of your budget. 

 

Car loan Pre Approval is quite simply then, getting approved for the loan before you make the purchase, essentially working backwards. You don’t have to pay the loan until you actually make the purchase, though you do have a maximum budget for your spending that beyond which, the loan will not cover, which given the point above, is actually a secret advantage. 

 

 

A clear budget and the relief of not worrying about loan approval can make shopping a much less stressful, and much more focused experience. What makes this even better is that you don’t have to take a loan once you’ve been pre approved, if you go to the dealership and realise that you can actually get a better deal instead, you’re free to take it instead of the pre-approved one. 

 

They’re also a big help if you currently have low credit score, as while you may not get a huge loan available, pre approval guarantees that you will get it, even with your poor credit, meaning you can shop without the looming fear of rejection that low credit brings. 

 

 

How To Get Pre Approved

Getting Pre Approved for a loan is quite simple, and follows a similar process to applying for a regular loan only with less stress at the end. When you’ve filled in all of the forms and submitted your information the lender or creditor will tell you how much you’ve been pre approved for, which will mostly depend on your credit situation and credit score. Once you have that, you’re free to start shopping. 

 

Now that you know what car loan pre-approval is, Click here to get approved for your next car loan online today! we have a team of credit specialists ready to help you get approved for a great priced car loan, and will work with you no matter your credit score.