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How important is a pre-approved car loan?

How important is a pre-approved car loan?
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finance finance
Montay Finance
November 25, 2022
What do you need to know? Buying a new car is always a good idea, but pre-approval on a car loan before buying is even better. A pre-approval of a Car loan allows you to get acceptance from the lenders to take up to a definite amount before you even purchase a car. With a pre-approved loan, you will be comfortable knowing your exact budget for a new vehicle and repayments. This way, you will be able to shop with confidence. Why get a pre-approved car loan? Purchasing a car is necessary and expensive, so car loans are available to make it achievable and affordable. With pre-approved loans, you can avoid last-minute surprises like High-interest rates and down payments. But these are not the only benefits of pre-approval of a car loan. Here are some more benefits of securing a car loan pre-approval
  1. Flexibility
Securing pre-approved car finance makes shopping so much easier, as you don’t have to rely on dealers to find a car loan for you. You can therefore focus on purchasing the right car without worrying about finances.
  1. Negotiating power
Knowing that the finance is already in place, You can now negotiate the price quickly. One of the crucial things to do while buying a car is to enter the negotiation from the area of strength. You can now move to any dealer if your requirements are not met.
  1. A lower rate
Pre-Approved Car finances allow you to get a lower rate than dealers’ high car loan rates. With a pre-approved loan, a car dealer has to furnish you with better interest rates than the pre-approved finance. Requirements of Car loan Pre-approval You need to consider some basic requirements before applying for car loan approval.
  1. Income requirement
Income requirement is a common demand for almost all types of loans. You must disclose your gross monthly or yearly salary and other income sources such as retirement or child support. In addition, You have to submit proof of income like payslips or bank statements to get approved for a car loan.
  1. Minimum credit score
Whether pre-approval or post-approval, a car loan will be challenging to be approved if you don’t have a fair credit score to qualify for a car loan. The promotional offers are reserved for people with excellent credit ratings.
  1. Eligibility and Proof of identity
You must be at least 18 years old to qualify for a car loan pre-approval. Besides that, You will need proof of identity, address and a valid driver’s licence. A driving licence or passport is a definitive proof of identity to submit for a car loan.
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