Why Do You Need to get Preapproved for a Car Loan?
You don’t need to get preapproved for a car loan if you can pay the full price of a car with cash. But the reality is most of us will have to finance a car purchase.
The problem, though, is it’s difficult to determine whether you’re being offered a good deal. This is where an auto loan preapproval can help you.
Getting preapproved for a car loan can be accomplished online. You can find a lot of banks, credit unions and lending companies offering competitive auto loans via the Internet.
The attractive interest rates advertised, however, are often reserved for people with stellar credit.
If you have less-than-perfect credit, expect to be offered higher interest rates and stricter terms. But find lenders that specialize in bad credit financing because they are willing to take customers like you into their financing programs. Get in touch with them to see what kind of interest rate you can get approved for.
If you are buying a used car, the preapproval requirements are different. Most lenders require their borrowers to purchase from a franchised dealer and not from an independent dealership or private seller. The vehicle to be financed must also meet certain age and mileage requirements.
In any case, you will know upon approval the maximum amount you can borrow and the interest rate you will get. These are two important things you need to know as you shop around for the best car financing offer.
Getting Approved for the Best Rate
An auto loan preapproval is not a special kind of loan. It is simply a term used to refer to the process of arranging auto financing before shopping for a car.
So getting preapproved for anÂ auto loanÂ is just like applying for a car loan. You need to complete and submit an application form and comply with all the requirements.
But don’t get preapproved for just any auto loan. Find the best one. There are at least two important things you need to do in order to achieve that:
How Does Auto Loan Preapproval Help You?