Pre Approved Car Loans
When shopping for a car, getting your loan pre approved is a way to make certain that you can afford the vehicle that you are looking at and avoiding disappointment later if you cannot get approved for a loan.
The pre approval process is straightforward.
The first step in the process is to determine what lender you wish to work with. There are several questions that you should consider asking the lender before committing to one company.
What contract terms do you offer? Contract terms typically range from two to seven years. A shorter term means a higher monthly payment, but less money paid overall in interest. Lenders typically offer a shorter term for an older vehicle.
Do the payment numbers that are quoted include a balloon payment at the end of the loan term? If the monthly payment seems too good to be true, it probably is, make sure that there will not be a large payment due at the end of the loan.
What interest rate do you offer, and is that fixed or variable? While a variable interest rate may seem attractive, keep in mind that that rate adjusts, typically up, and can unexpectedly increase the amount of your monthly payment. With a fixed interest rate, you know exactly how much your payment is each month.
Is a down payment required, and if so, how much? If you are trading in a vehicle, that will count as a down payment, although the amount will depend on its value. You can decrease the amount that you must borrow by paying cash for part of the amount you are putting down.
Is the loan secured or unsecured? A secured loan will offer a lower interest rate because you are providing the lender with collateral, the car. An unsecured loan is backed only by your history of repayment, and is typically your only choice for a vehicle that is older than seven years. If the vehicle that you are considering qualifies for a secured loan, that is most often the best choice.
Does the pre approval process carry any obligation? It should not, but is important to confirm this before going through the process. The pre approval process does not obligate you to any loan or guarantee that you will take out a loan. It is a tool, not a legal obligation. Along the same lines, ask if there are any upfront costs for the loan. Reputable lenders should not charge you an upfront fee before approving your loan.
If you know that you will need to borrow money to finance your vehicle, go through the pre approval process before you begin shopping. That way, you know exactly how much money you can afford to borrow, how much you need for a down payment, and can buy the car you want, when you want, without waiting for the loan to go through the approval process.
The pre approval process works the same way as any loan approval process. Ask the lender before your meeting what type of information you should have on hand. There are some general guidelines of what the lender will expect.
Lenders will want to see bank statements for the previous three months time period. They will also want to review your two most recent payslips. Finally, include a photocopy of your driver’s license with the information. Once you provide this information to the lender, the pre approval process can begin. While each lender is different, you should expect an answer fairly quickly, the same day sometimes, and definitely within two days.
Other Finance Options
Platinum Car Loans offers you all the right car financing options, these include Novated Lease or Novated Leasing, Commercial Hire Purchase, Chattel Mortgage, Car Lease, Finance Lease, Operating Lease and all Consumer Secured Car Loans.
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By Libbie Geissler, July 8, 2010 @ 1:14 pm
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By Henry Connerly, July 20, 2010 @ 3:40 am
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