Rather you have great credit or bad credit, obtaining approval for your auto loan prior to going to the dealership can be an ideal way to save time and hassle. Many companies will send out letters if you have shown an interest in an auto loan and pre-qualify. Even if you have not received these offers in the mail you can submit your application to a variety of companies who offer auto loans and get a pre-qualification letter before shopping around.
Some companies will require basic information on the type of automobile you are wanting to purchase. This information can include rather you are looking to purchase a new or used vehicle, how many miles the vehicle will have on it, and the year of the vehicle. Some companies have restrictions on the age or mileage of the vehicle and therefore this information is important.
When you are attempting to pre-qualify for a loan it is important to make sure that all of your information is correct. False information could cause what would otherwise be an approval to be denied. Some of the information that will be requested before you can be pre-approved for an auto loan includes home address, length of time at the residence, employment, payment method such as direct deposit or paper check, and the length you desire the loan to be for. This information in conjunction with the information contained on your credit report will be used to determine if you are pre-approved for the auto loan.
You may submit your application to multiple companies, and receive multiple offers. If this is the case review each offer carefully. Understand the type of vehicle the loan will allow you to purchase, and pay close attention to the length of the loan as well as the interest rate you are being charged. Some loans will require a larger down payment in exchange for a smaller interest rate. If you are able to comply with the larger down payment this is often the best option. Before accepting a pre-approval offer be sure you understand completely all of the terms and conditions so that you can comply fully once the loan is made.
Once you have obtained pre-approval from the lender of your choice it is time to go shopping. The lender will give you the information to take with you to the dealership. Once you have found the vehicle that you desire to purchase simply have the salesman fill out the paperwork, submit it to the lender, and wait for approval. The dealership will have you sign all the necessary documents as well as collect any down payment or other payments that are due at the time of the loan.
Pre-approved auto loans make it easy to go to the dealership, find your vehicle, and drive away a happy customer. Using pre-approval applications saves you time and in the case of a denial embarrassment. Understanding the requirements of the loan before purchasing a vehicle will ensure that you are able to comply full with the loan and will not receive dings to your credit report.