PriceProtect™
DriveShield™
GarageGuard™
Services
Insurance
Car Insurance
Compare Car Insurance with Jerry
Jerry’s Expert Advice
Car Insurance Estimates
Home & Renters Insurance
Renters Insurance
Loans
Car Loan
Compare Car Loans with Jerry
Jerry's Expert Advice
Car Loan Guides
Repairs
Car Repair Estimates
Repair Estimates for Popular Services
Advice
Read Car Content
Browse Jerry Car Advice
Check Out Expert Car QnA
Learn About How We Create Content
Jerry Data & Research
How does a preapproved car loan work?
I’m thinking about getting a new car and I heard that preapproval makes the process faster, but I’m a little confused by it. How does the preapproval process for car loans work?
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Congrats on getting a new car! Fortunately, the preapproval process is surprisingly easy to understand. Usually, preapproved
car loans
will work like this:- Once you choose a car and gather the documents you need for the loan, apply for the loan through the lender of your choice. Shop around to find the lender with the most favorable terms.
- The lender will perform a hard credit check to make sure that you qualify for the loan and to determine the amount and rate that you’re eligible for. This will have a small impact on your credit, so prepare for a **10- to 20-point drop on your credit report.
- After approval, your lender will issue a check for the amount specified on your application. You can either pick up the check directly from your lender or receive it in the mail.
- Then, bring the check to the dealership and use it to purchase your new vehicle.
- After you buy the car, most lenders will give you 90 days to send them the title. This is because the lender will have alienon the vehicle until your loan is paid in full. However, some states allow you to hold the title, in which case, you just hold onto it.
Preapproval is different from pre-qualification because of the hard credit check. If you prequalify for a loan, the lender performs a soft credit check. As a result, you won’t get an exact interest rate or offer amount from the lender.
However you decide to purchase your new car, don’t forget about your new car insurance policy. The
Jerry
app makes this easy by collecting the quotes for you, so all you have to do is look through the comprehensive list, find your favorite, and let the app help you sign up and cancel your old policy. The average Jerry user saves $879 per year!MORE: How to get a cosigner for a bad credit car loan
View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
Join 4M+ members in lowering their car insurance
You Might Also Be Interested
.webp&w=384&q=75)
Read Advice From Car Experts At Jerry
What Others Are Asking
Browse More Content
Insurance in Your State
Easiest way to compare and buy car insurance
No long forms
No spam or unwanted phone calls
Quotes from top insurance companies
