What Comes After Car Loan Pre-approval?
Congratulations! You’re pre-approved for a car loan! You’re now one giant step closer to getting into your dream car. But what’s next? We discuss.
Do you have pre-approval yet? Apply for car loan pre-approval today or keep reading to find out what comes next.
What is car loan pre-approval?
A pre-approval means you’ve provided your details, your circumstances are potentially matched to a car loan product, ready to go when you find a vehicle.
Getting car loan pre-approval is a really important step to take before you start car shopping.
A pre-approval gives you an accurate idea of exactly how much you’re likely to be able to borrow.
To get car loan pre-approval, you’ll need to provide certain information to a potential lender. They will then give you a maximum loan amount.
Bear in mind that you may not receive all the information about the loan such as fees, loan term and interest rates. This happens when you decide on a specific car.
After a pre-approval
Once you’ve received your car loan pre-approval, it’s time to go car shopping and lock in a loan product best fitting for you, the car and your lifestyle.
Let’s look at an example, Peter, who’s looking for a ute.
Peter provides information to the Positive team who in turn pre-approve him for $50,000. He doesn’t receive the funds into his bank account, but knows that when ready, a loan product is available, maxing out at $50,000.
Rates, repayments, fees and the actual loan product aren’t locked in yet because Peter hasn’t found the exact vehicle he wants to buy yet. These can change per the year, make and model of a car.
The next weekend, Peter goes car shopping and finds a Toyota Hilux matching his needs, however, the price is listed at $51,000. This is $1,000 more than he can spend as he’s pre-approved for $50,000.
Peter does some negotiating with the dealer and they agree on a price of $48,000, nice work Peter.
Now he knows the exact price, mileage, year and variant of the HiLux - these details are needed to lock in a loan product.
Peter provides these details along with the dealer’s contact information and the Positive team handles the rest.
A few days later, all is settled and Peter picks up the HiLux.
The original $50,000 is adjusted down to $48,000, as are Peter’s repayments.
When you find the right loan, you need to consider the term of the loan, as well as the interest rate and fees involved. Make sure to budget accordingly and take extra costs such as ongoing maintenance, insurance, and fuel each month into account.
Get all of your documents in order so that you can have these ready to show or send off as soon as your lender needs them. You’ll generally need to show proof of identification, residency, and income.
What are the advantages of car loan pre-approval?
There are many advantages of getting pre-approved for a car loan. You’ll be able to understand how much you have to spend on a vehicle, which really helps when it comes to speaking with dealerships or private sellers and negotiating the best deal.
With car loan pre-approval, you’ll also avoid making numerous applications for loans which can knock down a credit score. Your Positive broker can help you make applications sensibly and selectively after getting a car loan pre-approval.
What is the application process for car loans?
We can help you understand the entire car loan process. Check out our explanation of the car loans process from start to finish.
The Positive team guides you through each step – from initial phone call or online quote to speaking with your chosen lender and putting keys in pockets.
Rely on the Positive team like so many other Australians
With decades of experience working to help countless people find the best car loans, we have access to a huge range of lenders and loan products. We know the process back to front and inside out and the team can lead you through each step of the way – answering your questions and queries as we go.