Like when it comes to buying a house, getting your loan pre-approved can help you speed up your car buying process. If you are curious about this process or wonder how it can help you, let this article tell you what you need to know.
What Is a Car Loan Pre-Approval?
Getting a car loan pre-approval can be the first step to buying a new car. When you get a pre-approval, it means that a lender has reviewed your financial situation. It provides an outlook of what you can afford. With a pre-approval in hand, it's much easier to go car shopping.
A pre-approval letter will help in your negotiation with the car dealer, as you have an idea of what you can afford. Also, a pre-approval letter can help avoid the dreaded "buyer's remorse" since you are well aware of your budget and only choose the car within your budget.
Another benefit of having a pre-approval letter is that if you buy a used car, you can take this letter with you to the bank to finance your purchase. The bank will be able to look at your pre-approved loan amount, and if it is higher than the “asking price", then you have a good bargaining tool to use. Getting a car loan pre-approval ensures you a smooth deal, both financially and mentally.
How Does a Car Loan Pre-Approval Work?
To get a car loan pre-approval, you need to speak to a car loan broker about your finances. A broker can help you with your budget, current debts, and monthly payments. With the help of a pre-approval, you can show that you are serious about buying a car.
Ensure you have all your documentation together when you get pre-approval for your car loan. Bring in your current bank statements, including your credit card statement. You can bring in your payslips, along with any bonus payments private or company benefits that you receive. If you receive regular bonuses or salary increases, you will need to show that you can continue to make those payments.
When looking at your spouse's income, you will need to be sure to include that in your monthly income. Make sure to include the tax returns from the previous year and any other financial statements from your partner.
If you have any debts, you will need to show what debts you have and how much you pay. Getting a loan won't be easy if you pay less than your minimum credit card payments. If you have a loan with a bank, you can speak to that bank about getting a car loan pre-approval letter.
Can You Get a Car Loan Pre-Approval Letter Without a Job?
One of the common concerns regarding car loan pre-approval is whether or not you need to have a job to get a pre-approval letter. That is not the case. As long as you have a good credit score and a steady income that can cover your car loan payments, you can get a pre-approval letter.
Does Pre-approval Mean That My Loan Is Guaranteed to Be Approved?
A pre-approval letter does not guarantee that your auto loan will be approved. The pre-approval is only an indication of your financial situation, and it helps the bank know what they can approve. The bank still has to decide how much they will lend you based on your finances.
Conclusion
Getting a car loan pre-approval is a great way to speed up your car loan shopping. Once you have a pre-approval, you can go shopping with confidence, knowing that your loan will be approved. With the help of a pre-approval, you can be sure that you are getting a good deal on your car, and you will be avoiding "buyer's remorse". Going through the pre-approval process is easy, and it can help you enjoy your new car with confidence.
Wealthy You offers a variety of mortgage solutions to meet our clients' specific financial needs. Should you need car loan approval in Sydney, we can help. We are your alternative lending specialist serving Sydney for almost a decade. Contact us at (02) 7900 3288 or through our contact form.
