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The car you’ve wanted is finally available for purchase. You already made arrangements for the down payment. You go to the showroom, get the quote, fill out the loan forms, and submit the application to your bank. Now, the hard part starts. Waiting for the bank to approve your loan.
This is where the concept of a pre-approved auto loan comes to your rescue. So, what exactly is a pre-approved loan? Let’s find out in this article.
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When a bank/lender offers its longstanding customer a loan for buying a vehicle, without the customer applying for it, it is called a pre-approved auto loan.
Unlike a regular loan, a pre-approved loan comes with several benefits. The most prominent ones include:
Since the bank/lender has all your requisite information already, there is no requirement to go through the tedious process of collecting documents and filling out forms.
With a pre-approved loan, you can get a higher loan amount as the bank/lender already knows your credit history.
However, if you are formally applying for a loan, your application will undergo a credit inquiry initiated by your lender. Let’s go over what a credit inquiry is and the varied types of loans.
Whenever a person applies for a loan, a formal request is raised by the lender to the credit reporting agencies to check the credit score of the applicant. This process is called a credit inquiry. There are two kinds of credit inquiries:
When a lender checks your credit ratings before dispersing the loan, it is called a hard inquiry. Hard inquiries normally have a negligible impact on one’s credit score. But if several requests are raised within a short period, hard inquiries can bring down your credit score. Hard inquiries also negatively impact credit scores when a loan application is denied multiple times.
When an individual’s credit rating inquiry is made as a part of a background check, it is called a soft inquiry. An inquiry initiated as a part of a soft credit check auto loan has no impact on a person’s credit score.
With so many different models of cars to choose from, it can be very difficult to find the right one. The internet may not very helpful either. Thousands of websites are inundated with so many reviews that anybody would get further confused. To avoid all the chaos, follow this three-point guide:
As for anything major you wish to purchase, make a list of necessities and desires you would like your car to fulfill. Put down things like:
This is one of the tougher steps, especially considering the number of makes and models available in the market. Several offers float around from various manufacturers. But before considering all that, keep these three things in mind:
The price of the vehicle when it’s parked inside the showroom. This doesn’t include anything else.
Final price of the vehicle including road tax, insurance, service tax, etc.
Once you bring home the vehicle, there will be additional spending like fuel cost, servicing cost, and the likes. Hence, it’s better to carefully plan out these details beforehand.
The moment you type in the name of the make and model in a search engine, you will come across several recommended pages that will pop-up for reviews. But instead of getting hassled by all that information, look for details such as:
Driving a vehicle on the road is a risky affair. Hence, it is very critical to know what kind of safety features the manufacturer is offering.
Nowadays, vehicles are rated for quality based on performance, features, accessories, style, and comfort. Most reliable ratings are given by J.D. Power Circle Ratings.
Compare your preferred vehicle with other similar models in the price range you are looking at.
Once you’ve done the hard work of deciding a particular model you want to buy, it is now time to look for ways to make your purchase more affordable. This involves a bit of smart planning and execution.
Before you step inside a dealership, compare prices online of your preferred model with other similar offerings. Also, try and figure out the actual price of the car in your city.
Take a ride around the city and visit all dealerships of the manufacturer you want to buy from. Find out if one is offering a better price than the others or giving you more accessories to make it worth your time.
Many are reluctant to buy a used car. However, used cars have a very peculiar benefit. Buying an old car gives you a chance to get more features at a lower price.
If you already have a car, you can exchange it for some price relaxation while buying the new one.
Purchasing a vehicle is a game of smarts. If you know what you want and are willing to walk away when you are not getting it, you might be able to get the best price from the dealer.
Getting a pre-approved loan from a lender/bank is a boon in disguise. But certain banks are reluctant to give loans to non-U.S. citizens. This is basically due to the following reasons:
If you, as an immigrant, are trying hard to secure a car loan, look no further than Stilt. Although Stilt doesn’t provide car loans, you can easily get a personal loan that can be used to purchase a car. All you need to do is submit your application and wait for Stilt to update you within 24 hours. Once we’ve had a quick verification call with you, you will be provided with an offer. If you accept the offer and sign the promissory note, the transfer will be initiated within two to three business days. Then, you can use this loan amount to buy your dream car!
Owning a vehicle is a reachable dream for most of us. It allows us the freedom to travel at our choice of time and place. If you don’t want to use up all your savings to buy a car, pre-approved auto loans can be a boon in disguise. Maintain a healthy credit score. Do your due diligence. And enjoy your favorite ride.