When you get pre-approved for a loan, it is an agreement from the bank or credit union that they will allow you to borrow up to a certain amount of time. The lender will do a hard credit check. However, you will have anywhere from 14 to 45 days to apply for multiple auto loans without hurting your credit.
There are a few steps that you will need to take in order to get pre-approved for a loan. You will need to check your credit. Your credit report is one of the main factors that will determine whether you will get pre-approved. It will tell the lender how likely you will be to pay back the loan.
Review your credit for errors. It is estimated that 25 percent of credit reports have one or more errors. Contact the credit bureaus to have the errors corrected. You should also pay off any past-due accounts that you have.
You will also need to gather all of the necessary documents. This includes your driver’s license, Social Security number, income, and employment status. After you have gotten pre-approved, you will be ready to go car shopping.
Pre-approval is not necessary for getting an auto loan. However, it is a good idea for you to get pre-approved. There are several benefits you can reap from getting pre-approved.
Less Stress
The process of buying a car can be stressful. However, you will be able to greatly reduce your stress if you get pre-approved for an auto loan. Your pre-approval will be set, so you will know exactly how much you will have to pay and how long you will have to pay it back.
Focus on the Car
It is a good idea to know what you can afford before you go to the dealership. This will allow you to focus more on the car selection when you go to the dealership. You will be able to look for cars that are within your price range.
Less Time at the Dealer
You probably do not want to find a lot of time at the dealer. You probably want to find what you are looking for and drive it home. People who get pre-approved auto loans by SCCU will be able to spend less time at the dealership. You will also be able to spend less time negotiating with the dealer.
Downsides of Not Getting Pre-Approved
The car buying process will be a lot more stressful if you do not get pre-approved beforehand. You may find a car that you like and later find out that you cannot get the funding for it. That is why it may take you a lot longer to get your car.
Keep in mind that there are some people who cannot get approved for an auto loan. However, there are several things that you can do to increase your chances of getting pre-approved in the future. You will need to work on your credit. You may also want to get a cosigner. A cosigner will be responsible for paying back the auto loan if you can’t.
