Is it time to get a new vehicle? Before making any quick decisions about the financing of your dream car, it is important to sit down and consider your options. That way when you’re ready, you will have confidence knowing that you have explored all of your options. To help you prepare, here are the steps to help you get-pre approved for an auto loan.
1. Check your Credit
When getting an auto loan, lenders will usually review your credit history before issuing you a pre-approval. Your credit report helps them predict how likely it is that you will repay the loan on time. To prepare, it is a good idea to do your own research beforehand and check your credit and review your credit report to ensure all the information is accurate. If you find incorrect information on a credit report, it is important that you dispute it before speaking to a lender.
You also will want to inquire whether they plan to run a hard or soft credit check. A hard inquiry means that a lender with whom you’ve applied for credit reviews your credit report as part of their decision-making process. This type of inquiry appears on your credit report and can influence your credit scores. On the other hand, a soft inquiry means that you check your own credit or a lender or credit card company checks your credit to pre-approve you for an offer. Soft inquiries do not affect your credit scores.
2. Gather Your Information
Getting pre-approval can require a lot of information. Lenders often request information about your identity, income, employment information, credit history and other debt payments when reviewing your application. To be better prepared for this meeting, make sure you have your social security number, driver’s license, employment status, and income on hand. When your application is complete, a lender will let you know whether you’ve been approved or not.
3. Compare Your Offers
Once you get pre-approval from a lender, you will want to compare the offers you get from the dealership to the one that you obtained from your credit union or other financial institution. You want to make sure that you get the best deal and that you do not end up paying more than you should.
4. Come to a Decision
Once you’ve decided on the best offer, you can start shopping for your ideal car. You just want to be aware that pre-approvals are typically valid for 30 to 60 days.
When you find a car you want to buy, you can submit a formal loan application that may include a lot of the same information you used for the pre-approval, including specifics about the car such as the year, make, model, mileage, and VIN.
Do you need help getting pre-approved for an auto loan? Let us know!
Let Camino help you. We want our members to find the best option that works for their needs. We offer competitive auto loan rates. Please give us a call at 800-835-3400 to speak with one of our Member Advisors, or contact us for more information.