|By Wendy Clay on April 2, 2012
If you are thinking about purchasing a car in the near future, and are unsure how you will finance that new purchase, please consider pre-approval for your car loan rather than financing through the car dealership. Getting a pre-approved car loan offers a wealth of benefits, most notably lowering your stress when you finally go to the dealership to negotiate for your vehicle.
Obtaining a pre-approved loan is fairly simple. You will first want to do rate checks for multiple lenders, and as you do this, keep your credit score in mind so that you can estimate where you might fall in the range of rates offered so you will be able to spot unfair offers. Once you have done this and chosen the lender you wish to work with, you are ready to apply either online or in person at a local bank or credit union. (Online applications are usually quicker and easier to complete, especially for those with bad credit). You will have to provide information regarding your credit history, current income, and current finances as well as information pertaining to the down payment amount you can afford and are willing to pay and the repayment plan you would like. Using this information, the lender will be able to tell you whether or not you qualify for a loan and if so, the interest rate and credit limit of the loan. Once you are approved for the loan, you will be given a check (your credit limit will be listed somewhere on the document) so you can head to the dealership to purchase your car. You will have a set period of time to use the check, and if you later decide that it just is not the right time to purchase a car, no worries. Simply do not use the check and the loan will be considered terminated.
As you can see, the steps for getting a pre-approved car loan are extremely simple, but the benefits of doing so are enormous. First, by obtaining the loan, you no longer have to worry about getting to the dealership, finding the car of your dreams, and then not qualifying for a loan. Also, you will pay lower interest rates than you would on a loan from a car dealership. Finally, by knowing your credit limit in advance, you will be able to refine your car choice to fit that limit in advance, rather than doing so at the dealership. After considering these numerous benefits, please take the initiative to get pre-approved for your next car loan!
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