Applying for an auto loan is no longer a lengthy or complicated process in today's digital world. In fact, when you get pre-approved for an auto loan, you will discover that it streamlines the process, and your next vehicle is only a few clicks away.
What Does it Mean to Get Pre-Approved for an Auto Loan?
Pre-approval gives you an idea of how much car you can afford, your estimated interest rate, and what you can expect for a monthly payment. Pre-approvals are based upon the financial information you provide and the results of a credit check.
The pre-approval process doesn't take long, and you should receive a decision within a few days. Once you receive your pre-approval, you can narrow down your vehicle search based on price.
When you show an auto dealer your pre-approval letter, they will take your search more seriously because car shopping with a pre-approval is usually like shopping with cash.
Where Can I Get Pre-Approved for an Auto Loan?
You can get pre-approved for an auto loan anywhere you can get the actual loan. That means you can get pre-approved at a bank, credit union, or dealership.
Although, if you’re thinking about financing with a dealership, it’s best to go into the process well-informed and on the lookout for hidden fees and other changes. But that’s one of the best benefits of getting pre-approved, and we’ll talk about that next.
Benefits of Getting a Pre-Approved for an Auto Loan
Getting pre-approved for an auto loan improves your car buying process in several ways. Here are the most significant benefits you'll get from pre-approval.
You’ll Know Your Budget
With a pre-approval, you’ll understand the budget range for your vehicle and corresponding potential monthly payments. This knowledge allows you to narrow down your search based on what you can afford. As a result, you won’t be tempted to look at vehicles outside of your price range, and you won’t have to worry about overextending yourself.
You’ll Save Time
Once you know how much you can afford to spend, you’ll save time by narrowing down your criteria and focusing on finding the vehicle with the right features and style for your needs. Auto loan pre-approval drastically reduces the time needed to search and evaluate vehicle options.
You’ll Get Transparency
With auto loan pre-approval, you're made aware of term lengths, fees, total interest, and other essential factors that make up the bigger picture of your loan. Since some lenders advertise promotions that look great until you examine them more closely, getting pre-approved allows you to see all of the terms spelled out clearly so there’s no confusion.
You’ll Be More Competitive
Auto loan pre-approval gives you a leg up against other buyers who may have an interest in the same vehicle. Private sellers and dealerships are more likely to be open to negotiations when they know you have the funding and aren’t wasting their time. In other words, you’ll be fast-tracked to the front of the line, which is an enormous benefit in this tight auto market.
You’ll Be Better Equipped to Bypass Dealership Financing
Getting financing at the dealership will often cost you more than financing with a separate lender. But it’s so easy to think the convenience of onsite car shopping and financing is the way to go. When you get pre-approved, you’ll know which option is better and be able to make the best choice for you instead of feeling pressured into financing where you buy your car.
You’ll Have the Power to Make the Best Decisions
If you complete your pre-approval and find that you don't qualify for enough or your interest rate is too high, you can put a pause on your vehicle purchase. Instead, you can take that information and improve your credit score or take other steps to secure a better auto loan. Then return to the process when you're ready.
3 Steps To Get Pre-Approved For An Online Auto Loan
Getting pre-approved for an auto loan is simple and only takes a few minutes. Here’s how easy it is.
Find The Right Financial Institution
It's essential to pursue an auto loan with a trustworthy lender who offers the best financial benefits while providing excellent service. If you make inquiries with multiple lenders, compare rates, incentives, and the loan’s APR to truly understand what the loan will cost you.
Submit Relevant Information
Online auto loan applications are relatively simple to complete with the correct information at hand. Most applications include fields regarding:
• Preliminary Information
• Loan Information
• Personal Information
• Employment & Income Information
Once you have completed the application in its entirety, confirm your submission.
Wait for Approval
Pre-approval will only take a few days at most. Loan officers will contact you whether or not your application has been successfully approved.
Convenience Of Applying For An Online Auto Loan
There are many reasons to consider applying for your next auto loan using an online portal.
• Online auto loan applications can be processed much more quickly, with all relevant information aggregated into a single area. However, auto loans applied for in person may require more time to complete.
• Online auto loans can be applied for at any time or location. A single device with an internet connection is all that is needed to complete and submit applications.
Benefits Of Credit Union Online Auto Loans
Many lending institutions exist for auto loan financing. There are at least four different institutions that offer auto financing options to consumers.
• Car Dealerships may offer auto loans in one of two ways: working as a middleman with an approved bank or by financing directly through their company. Although this may be the most convenient option, fees and interest rates associated with dealership lenders are very steep and are often undesirable.
• Banks may offer flexible pre-approval options. However, hefty late fees and sizable interest rates may disqualify them from many borrowers looking for the best deal.
• Private Lenders are less common, but still a viable financing option. However, missed payments or late transfers may result in interest rates that are too high to handle and may lead to severe financial damage.
• In contrast to the above options, credit unions are the best choice for auto loans and refinancing. As not-for-profit institutions, credit unions are owned by members rather than a governing body. This community ownership helps to drive competitive rates and excellent service.
Looking For An Auto Loan? Get Pre-Approved Now!
Best Reward Federal Credit Union has never believed in second best. Our professional team is proud to offer superior auto financing services. Our auto loan pre-approval process was built with our members in mind, geared towards providing a smooth experience for all. Plus, you can get pre-approved and shop in one convenient location.
To capitalize on your auto loan pre-approval, rely on the Best Reward Federal Credit Union team today.