How do you get preapproved for a car loan?

What do I need to do to get preapproved for a car loan? I heard that’s the best way to get a good loan, but I don't know where to start.

Answer
Loans can be confusing, but don’t worry! To get pre-approved for your car loan, follow these steps:
  • First, choose which car you’d like to buy.
  • Once you have a car in mind, gather the documents you need for the loan—including the amount of money you’ll need and any trade-in information about your current vehicle.
  • Before you settle on a lender, be sure to shop around to find the most favorable terms and interest rates. Once you find a lender, you can apply for preapproval.
  • When you apply for the loan, the lender will perform a hard credit check to ensure that you qualify and determine the amount you can borrow.
  • Once you’re approved, your lender will provide you with a preapproval letter and the amount you can borrow. When you go to a dealership, you can use the letter as leverage for a better deal.
  • Keep in mind that preapproval only lasts for 60-90 days, so once you receive the letter, don’t wait!
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Liz Jenson
Answered on Dec 02, 2021
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