Here’s how to get preapproval. First, shop around to find the best loan rates between dealerships, banks, credit unions, and online lenders. Then, apply for preapproval and show all of the required documents, which may include:
Most preapprovals are accepted or denied within 24 hours, so you won’t have to wait long after applying. (This is different from applying for full approval right off the bat.) If you’re approved, you’ll get a letter stating how much money you’re approved for as well as potential interest rates based on your credit score and the term (length of loan) you choose.
With the preapproval letter in hand, you can find a car that fits your budget and even use it as a negotiation tool with the dealer. Once you have the car you want, simply return to the lender to finalize the loan.