Getting Preapproved for a Car Loan – Saving You Money, Time & Hassle!
A traditional part of the home buying process is also part of the best vehicle shopping experience. The process of obtaining preapproval for an auto loan is now catching on as smart car shoppers realize the savings and control it can offer them. If are preparing to shop for a car and plan to finance the purchase, here are some credit tips and helpful information to get you started.
How to Prepare for the Application Process
Similar to the home loan process, getting preapproved for an auto loan starts with your credit score. Lenders want
to see proof of your debt management skills in the past, before offering you a loan.
It is very important to take time to make sure that your credit report is accurate, before you apply for preapproval
of any loan. Even small errors can mean higher interest rates or the embarrassment and disappointment of being denied
for the car loan, so take the time to make sure all information is correct. It is always best to repair credit, if needed,
prior to the application process.
If you find an inaccuracy on your credit report, taking the time to correct these will greatly improve the preapproval
process and your chances of getting a great rate on the loan, itself. If you have blemishes on your credit that will influence
your borrowing status, it may be wise to seek reputable credit repair assistance, before proceeding.
After you are satisfied that your credit report depicts a fair, and honest, portrait of your borrowing and repayment history, now you are ready to begin contacting lenders and begin the application process. This should be done before you begin looking at vehicles, so that you will know exactly how much you want to spend, and you will be better able to resist the temptation to splurge on a car that is more expensive than what you need.
As you speak with the lender, verify any restrictions that they may place on the loan. Lenders may restrict purchasers of new vehicles to shop at established dealerships. Restrictions for a pre-owned vehicle often include restrictions on the age, type, condition and mileage of the vehicle you are considering. This is done to ensure that the vehicle’s value will support the amount of the loan, in case you default and leave the lender to sell the car.
Time To Shop
Once you have found the auto loan that best fits your needs and obtained preapproval, it is time to shop. Keeping in mind any lender restrictions and your preapproval limit will help you set parameters for your search that will make it easier to quickly locate a great vehicle.
When you have found the right vehicle, your preapproved loan status can often be used as a negotiation tool, sometimes resulting in a better offer from the dealership’s finance department.
For more information on how to repair your credit prior to getting preappproved for an auto loan, contact us at 617-265-7900 or request a free consultation below.