Why Should I Get Pre-Approved For a Car Loan?
Getting pre-approved for an auto loan might seem unnecessary since the dealership offers financing; however, it could save you a lot of time and money to decide first on a lender before you pick a car.
Here are 5 reasons why getting pre-approved for a car loan makes financial sense.
1) You'll know exactly what you can afford
Think about the last time you purchased a car. Did you know how this new car payment would fit in with your other bills like rent/mortgage, cell phone, electricity, and all the other expenses you pay each month? Will your new payment make it more difficult to use your money for other expenses like vacations and clothes? Finding out what you can truly afford can save headaches down the road.
2) Fall in love with a payment first
Choosing the right car is an important part of the process, but you may have the car payment for just as long. By getting pre-approved, you know exactly how much your payment will be each month and if it's going to be easy to make the payment or if it will stretch your budget. This is a good time to pause and evaluate how this new payment will affect your other financial goals.
3) Your application is approved for up to 90 days
Despite all the options to search online for cars, the reality of looking at and test driving a car can make it challenging to find exactly what you are looking for. When you get pre-approved at Heritage Credit Union, your application is good for 90 days, making the process less stressful because you have time to find the right car.
4) Avoid pressure at the dealership
We've all experienced the pushy salesperson ready to get you into the car of your dreams – and into the finance manager's office. By getting pre-approved, you can potentially avoid this step since you've already decided on your lender and have determined the details of the loan on your own terms.
5) Multiple credit inquiries can affect your credit score
Getting pre-approved can help you maintain your credit score by avoiding unnecessary credit inquiries. According to consumerfinance.gov, "In some cases, applying for multiple loans over a long period of time can lower your credit score(s). Generally any requests or 'inquiries' by these lenders for your credit score(s) that took place within a time span ranging from 14 days to 45 days will only count as a single inquiry, depending on the credit scoring model used. You can minimize any negative impact to your credit by doing all of your shopping in a short amount of time. You could save hundreds or even thousands of dollars by shopping for the best rate and terms on a loan."
Getting pre-approved before you shop for a car can make the entire purchasing process better for your budget and avoid a lot of hassle. Plus, it can save you time and money because you get the best rate and experience, and that's really what it's all about!