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simonapilolla/Getty Images July 21, 2022 Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to take control of their finances by providing clear, well-researched information that breaks down otherwise complex topics into manageable bites. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. When it comes to vehicle financing, you want to do all you can to be in control of negotiations. One way to have an edge when purchasing a vehicle is to apply for auto loan preapproval. Taking this step means that a potential lender has looked at your credit history, application and required documentation and is willing to give you a formal loan offer of a specific amount. This is different from prequalification — though the terms are used interchangeably at times. When you prequalify for a loan, the lender only does a soft credit check, and approval isn’t guaranteed until you submit the full application. Getting preapproved for a car loan only takes a bit of additional time and ensures that you have a firm idea of not only how much you can spend once you go car shopping, but also the interest rates and terms you’ll likely be offered. Step 1 Organize the necessary documents
You can get preapproved for a car loan by going through online lenders, banks or credit unions. No matter which option you choose, the first step is to gather all the necessary documents needed for an application. These include: Personal information, like your name, Social Security number, driver’s license, contact information and home address. Income, including your employer, its contact information and your annual income. The amount you want to finance and the preferred auto loan term. Information about the age and mileage of the vehicle if you’re buying used. Trade-in information, if applicable. Step 2 Shop around for loan options
Just as you will shop around for your vehicle, it’s a good idea to compare lenders as well. Your interest rates are determined by your credit history and a combination of other factors — all of which may vary to some degree by lender. By shopping around, you may be able to secure a more favorable interest rate, as well as more beneficial loan terms. Securing an interest rate that’s even a tenth of a percentage point lower can make a big difference in how much you spend over the life of a loan. To get the best deal, fill out applications with multiple lenders. Check out Bankrate’s winners for the to start your search. Keep in mind that preapproval applications will temporarily reduce your credit score if they require a hard inquiry. Because of this, it’s best to complete all applications within a two-week period so that they only count as a single inquiry. Step 3 Submit the preapproval application
Depending on the lender, the application process will be similar to that of a typical full loan application. You can visit lenders’ websites or apply in person to submit your application. If you choose to submit online, be sure to spend some time researching the most . No matter which way you opt to submit your application — online or in person — you can expect to spend about 15 minutes completing each application. Some lenders have a more extensive preapproval application process than others, and some may require a minimum credit score or information about vehicle age and mileage. Look for details about application requirements on lender websites prior to applying. Benefits of auto loan preapproval
Confidence
Protection against unnecessary add-ons
Better grasp on expected cost
Stronger negotiation power
Next steps
If you’re preparing to go car shopping, getting preapproved for an auto loan will give you a firm idea of how much you can spend. It also puts you in control when it comes time to negotiate. Before submitting your preapproval application, gather the necessary documents — and if you plan to apply online, be sure to research reputable lenders. Learn more
SHARE: Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to take control of their finances by providing clear, well-researched information that breaks down otherwise complex topics into manageable bites. Related Articles