How to Get a Pre-Approved Loan for a Car


Getting pre-approved for a car loan can make your car shopping experience much easier. When you are pre-approved, you know how much you can spend, you know how much it will cost you to own your new car each month and you do not have to worry about haggling with the dealership over how you will finance your purchase. Prior to meeting with your bank, there is information you need to collect. Also, there are some basic guidelines you should understand to make sure you get the best deal for you -- and not the best deal for the bank.

Things You'll Need

  • Your pay stubs from the last six months
  • Expandable file folder

Getting a Pre-Approved Car Loan

Collect all of your pay stubs from the last six months and make copies. The copies are for your bank. Keep this information, and all of the information for your pre-approved auto loan, in an expandable file folder.

Use the various auto loan calculators available on the Internet to get an idea of how much you should expect to spend per month, based on various interest rates and different car prices. You will want to be prepared to discuss the terms of your pre-approved loan with your bank, rather than simply accept the terms they are offering. (If the bank gives you amounts that vary more than 20 percent from what you found in your research, ask to see how they are arriving at their numbers.)

Analyze your household budget and determine what kind of monthly payment you realistically will be able to afford. It is important to stay within your budget because the bank may offer you a loan that calls for a bigger monthly payment than you are willing to pay. When you know how much you can afford prior to negotiating with the bank, you can make decisions that fit into your budget.

Determine how big a down payment you can afford. A good number to try to achieve is a down payment of at least 10 percent of the cost of the vehicle.

Shop your pre-approval around to other banks to see if you can get a better deal. Be careful, though, as many pre-approved loan agreements are good only for a set period of time, and you will want to purchase your vehicle before your agreement runs out. So, do not spend too much time shopping for a better deal.

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