Does prequalification guarantee a car loan?
My dad told me that I should get prequalified for a car loan to help me set a budget. If I get prequalified, will this guarantee a car loan in the future?
A prequalification does not guarantee you for a car loan, but it’s still a smart idea.
Like a preapproval, a prequalification allows you to see if your credit is strong enough for a car loan, sets an expectation for a possible budget for your purchase, and helps as a negotiation/bargaining chip.
But unlike a preapproval, you can get all of this information with no hit to your credit. A prequalification only requires a soft inquiry on your credit, meaning you won’t have to worry about your credit dropping five to 10 points like it would with a preapproval.
To apply for prequalification, you’ll need to present the lender with:
- Proof of identity
- Social Security number
- Employment verification
- Proof of income, such as pay stubs
To get a prequalification, you still need to shop around like you would with car insurance to find the best rate. Once you sign on a loan, you’ll need to show proof of car insurance as part of the requirements of your loan.
Lenders will require full coverage for a financed vehicle, so be sure to hop on the Jerry app to find the best deals. Jerry compares personalized rates from more than 50 top providers and delivers the best deals to your phone in minutes for free. The average Jerry driver saves $879 a year on car insurance!
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