Benefits of getting preapproved for an auto loan
We all seek approval, whether it’s from a parent, a mentor, or a karate instructor. But you know what’s better than approval? Preapproval. Unfortunately, preapproval is not something that exists in your day-to-day relationships. But if you’re thinking about buying a car, you’re in luck, because preapproval is exactly what you need to get behind the wheel of your new (or used) ride.
What is a preapproved car loan?
Getting preapproval from a lender for a car loan means getting approved to borrow up to a certain amount before you’ve even stepped foot on a car lot. For many car shoppers, it’s the other way around. They go looking for a new car and then go about getting approved for a loan once they’ve found the car that checks all of the boxes on their wish list. But there are benefits to shopping for a car with a preapproved car loan in your back pocket.
Benefits of car loan preapproval
To start with, getting preapproved for a car loan means you have one less thing to worry about. You can also set a realistic budget for yourself. Because you have an idea of what your interest rate and loan terms will be, you know what you can afford to make for a down payment and how much you’d be able to pay each month towards your loan.
Preapproval also allows you to focus your attention where it needs to be: on the car itself. Once you know how much you can spend, you can narrow down your options to cars within that price range. You may also have more negotiating power at the dealership. Many car buyers will take whatever financing is offered to them at the dealership to avoid losing out on the car they want. But with a preapproved car loan, there’s no pressure to accept the dealership financing.
How to get preapproved for an auto loan
Just as you would with any other loan, auto loan preapproval starts by going to a lender. It might be worth going to more than one, in fact. Then you can compare quotes between the different lenders and choose the loan with the rates and terms that are best for you. It’s also best to apply within a short period of time. If multiple lenders make a hard pull on your credit within 14 days, it counts as one. So act fast when applying and making your decision.
Preapproval from Vibrant Credit Union is valid for 30 days. If you want to start the clock now and take a step closer to owning your new car, please get in touch with us.