Advantages to Pre-Approved Car Loans

Get pre-approved for a car loan before you go shopping. This will give you a lot of freedom and save you money. Think about these pros:

1. You only have to worry about one thing at a time—first the money, then the car. Car salespeople are taught to close the deal by getting you so excited about the car that you forget to use your head and common sense during the application and negotiation process. Make sure this doesn't happen to you.
2. You won't have to give up rebates or discounts from the dealer to get a lower interest rate, since your loan has already been pre-approved.
3. You'll know how much car you can afford even before you go to the dealer.
4. You won't have to put down a big amount of money.
5. If you get pre-approval, you are in charge. When you know how much you can borrow and what the terms of the loan are, you don't have to deal with the cost and confusion of dealer financing.

Getting pre-approved for a car loan is quick, easy, and simple. In many cases, you can get a response in as little as a day or two. However, there is one important step that you must not skip.

1. Check your credit report

Rates and terms are different for every loan. If you know what's in your credit report and score, you can get a general idea of what terms you can expect or even find out if you'll be able to get a loan. Your credit score is an objective number that lenders use to figure out if they should lend you money. Most of the time, people with better scores get better interest rates. Scores can be anywhere from 300 to 850. If your score is over 600, it's likely that you can get a car loan. Rates are best for people with scores of at least 720. Check out bankrate.com to find out what rates lenders are offering based on your credit score right now.

Putting together the application

You can get a pre-approved car loan in a number of ways (nominal application fees may apply).

1. You can also go to the website of your bank and fill out an application there.
2. You can fill out and mail the application for a loan that is in the brochure that your bank or credit union gave you.

You can also just pick up the phone. Some banks have longer hours of service, so you can call them from home or the showroom to get pre-approved for a car loan.

1. You can look on the Internet for a financial institution you don't work with right now to find out what options are available.
2. You can choose to get 100% financing, which includes the costs of taxes, tags, and title.

If you decide to apply for a loan online, be careful, especially if you don't know the potential lender. You don't want to end up in a bad situation. Identity theft and fraud are at an all-time high, so you should always protect your credit and personal information.

And don't worry, just because you're pre-approved doesn't mean you've agreed to everything. It just helps you make plans based on the best options you have. You don't have to take the loan if you change your mind. You just can't lose.