Welcome to Lesson 4 of Car Loan University 🎓
Today's learning objectives are:
Understand the car loan pre-approval process
Discover the benefits of pre-approval
See how simple it can be
What is car loan pre-approval?
It is a provisional commitment from a lender to provide you with a car loan up to a specified amount. The lender agrees to the loan in principle but delays full approval and does not release any funds until you have selected a car to purchase. Pre-approval is only valid for a set period of time and is subject to final checks by the lender. (Note that some lenders do not offer pre-approval on car loans).
Getting pre-approved for a car loan can save you stress and money.
Here’s an in-depth look at why getting pre-approved for a car loan before you go shopping is a great option:
1. Know your budget
With a pre-approved car loan, you have a clear understanding of your budget before you hit the car yards. It specifies the maximum amount you can borrow, helping to focus your price range and giving you confidence to make an offer.
2. Strengthen your negotiation power
With a pre-approved car loan, you can walk into a dealership with the confidence of a cash buyer. This can give you an upper hand in negotiations, as you have the power to finalise a purchase on the spot.
3. Avoid high-interest dealer financing
Dealer financing often comes with higher interest rates and additional fees because no other lenders are competing for your loan. When My Finance Agent finds you a great loan, you know that we've compared our entire panel of 60+ lenders.
4. Streamline the buying process
Speed up the car buying process by having your finance already sorted. With pre-approval, much of the paperwork is already completed, allowing you to focus on selecting your vehicle. According to the Motor Trade Association of Australia (MTAA), pre-approval can significantly reduce the time required to finalise a car purchase.
5. Protect your credit score
Applying for multiple loans in a short period can negatively impact your credit score. By getting pre-approved through a broker, you limit the number of hard inquiries on your credit report. This helps you maintain a healthier credit score during the car buying process.
6. Plan your repayments
Knowing your loan term options, personalised interest rate, and monthly repayment figure allows you to plan your finances more effectively. We can help to ensure that your loan repayments fit comfortably within your budget and there are no nasty surprises down the line.
7. Increase your chances of getting a loan
By going through the loan pre-approval process, we can help address and fix potential issues early on. For instance, any red flags in your credit history are better resolved before you're ready to buy. When you've found a car to buy and it comes time to finalise your loan, much of the process will already be completed!
How to get pre-approved for a car loan
The good news is that the application process can be very simple:
Chat with us about your needs and check that you're eligible
Let us compare lenders and get you personalised rate quotes
We'll coordinate the application paperwork and supporting documents
Fast approvals
We may be able to get your car loan approved in as little as 24 hours!
Got questions? Call and talk with a lending expert on (02) 8313-8400 or request a call back.
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