What do you need to know?
Buying a new car is always a good idea, but pre-approval of a car loan before buying is even better. A pre-approval of Car loan allows you to get acceptance from the lenders to take up to a definite amount before you even purchase a car. With a pre-approved loan, you will have the comfort of knowing your exact budget to spend on a new car and what your repayments are going to be. This way, you will be able to shop adeptly.
Why get a pre-approved auto loan?
Purchasing a car is necessary and an expensive practice, which is why car loans are available to make it achievable and affordable. With the pre-approved loans, you can avoid last-minute surprises like High-interest rates and high down payments. But these are not the only benefits of pre-approval of a car loan.
Here are some more benefits of securing a car loan pre-approval
Securing pre-approved car finance makes shopping so much easier, as you don’t have to rely on dealers to find a car loan for you, which generally are not favourable terms. You can focus on purchasing the right car without worrying about finances.
2. Negotiating power
Knowing that the finance is already in place, You can now negotiate the price easily. One of the crucial things to do while buying a car is to enter the negotiation from the area of strength. You can now move to any dealer if your requirements are not met.
3. A lower rate
Pre-Approved Car finances allow you to get a lower rate than dealers' high rates of a car loan. A dealer acts as a middleman and increases your ARP. Thus, a significant increase in interest rates. With a pre-approved loan in hand, a car dealer has to furnish you with better interest rates than the pre-approved finance.
Requirements of Car loan Pre-approval
There are some basic requirements you need to consider before applying for a car loan approval.
1. Income requirement
Income requirement is a common demand for almost all types of loans. You have to disclose your gross monthly or yearly salary and other income sources such as retirement income or child support. In addition to that, You have to submit proof of income like payslips or bank statements to get approved for a car loan.
2. Minimum credit score
Whether pre-approval or post-approval, a car loan will be challenging to be approved if you don’t have a fair credit score to qualify for a car loan. The promotional offers are reserved for people with incredible credit ratings.
3. Eligibility and Proof of identity
To qualify for a pre-approval of a car loan, You have to be at least 18 years old. Besides that, You will need proof of identity, proof of address and a valid driver’s licence. A driving license or passport is an ideal proof of identity to submit for a car loan.