A Complete Guide: Importance & Benefits of Car Loan Pre Approval in Canada

Endless paperwork, a checklist for qualifying pre approval car loan Canada, estimation of maximum loan amount - these are some of the many factors that influence what type of car loan you will choose when you fill out your application for British Columbia car loans.

While you can try to use a car loan calculator to estimate the total amount, it still does not help you know other essential details, such as whether you have the right qualifications for a pre approved car loan Canada or details about the terms of the loan. So, how can you get preapproved for car loan, and how does it help you?

In the following sections, we will explore the importance of car loan pre approval and how it can help you with your car shopping before you step inside British Columbia car dealerships. Read more here:

What Is A Car Loan Pre-Approval?

A car loan pre-approval is a form of review from the auto dealership that determines whether you qualify for the auto finance loan based on your credit score history and current financial health.

Think of this: when you cross a street, you will come across crosswalk signals that show red and green lights. When it's the green light, we understand that it is signaling to us that it is safe for us to cross the road! Similarly, auto loan pre approval helps us understand when it's financially safe for you to finance your car, and whether you qualify for it!

The car dealer will review your credit history, income, and overall finances to let you know the estimated loan amount and a rough estimate of the car loan interest rate. It's like ticking off the checklist to get a car loan, except the dealership does the work for you and lets you know about the options available!

Unlike a full loan application, vehicle loan pre approval doesn’t lock you into the deal. You will still have the liberty to browse through your financing options, choose your car, complete the paperwork, and check for any other additional information needed for the personal loan. When you get pre approved for auto loan, it puts you in the driver’s seat without the car keys, allowing you to understand the total loan payments you may need to pay over time and increasing your bargaining power at the dealership.

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Auto Loan Pre Qualification Vs. Pre Approval: What's Better for Your Auto Finance Loan?

It’s easy to mix up auto loan prequalification and pre-approval, but they are both completely different. This is how they are both different from each other:

How To Get Pre-Approved For An Auto Loan

If you want to get pre approved auto financing solutions, then don't worry, because the process is easy. It involves:

1. Check Your Credit Score: You can check your credit report from Equifax, Experian, and TransUnion for free once a year. A better score means that you will be able to qualify for better car loan rates British Columbia.
2. Gather Documentation: You will need to submit essential documentation such as proof of income, details of your job, details of your rent or mortgage, and information related to your current debts. This allows the dealer to gain a proper understanding of your financial situation. 
3. Submit Your Application: Complete your application form. Double-check and make sure all the information is accurate, and wait for your pre-approval in the next 24 hours!
4. Get a Car Loan Pre-Approval: The dealership will send a pre-approval letter within 24 hours, after which you can go forward with the final process, depending on the loan terms and agreements. Go through your options in vehicle financing and complete the loan application for your used or new vehicle!

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What Are the Benefits Of Pre-Approved Car Loans?

Your car finance pre approval comes with many added benefits! It includes:

• Improves Negotiation Powers: Dealerships are always on the lookout for buyers who are ready for a car purchase. Your application for auto financing pre approval shows that you are serious about your decision, which also means that you're likely to get more negotiation power during the final deal.
• Speeds Up the Process: After being pre approved for a car loan, you have already completed most of the needed documentation required for the loan approval process. All you need to do is choose the car and complete the rest of the process when applying for a car loan!
• More Clarity over Budget: Pre approved car loans online help you to avoid overstretching your budget. You will not end up with car payments you can’t handle!
• Find Lower Rates: You will have ample time to compare multiple offers, which makes you more likely to secure the best offer with low interest rates.
• Confidence and Peace of Mind: You will have peace of mind by having the time to go through your options before you purchase a car. Your decision will be more informed, and it will help you make a more confident decision for your new car.

Where can you get pre-approved for a car loan?

You can get pre-approved within 24 hours of submitting your application at Auto Lending Hub! Moreover, you will be able to browse through our vast collection with over 2500+ new and used cars at the dealership. Get pre-approval for an auto loan today!

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Conclusion

Securing a car loan pre-approval is a smart choice. Before you reach out to an auto dealership, it gives you more clarity on available options and the confidence to drive off in the vehicle you have been dreaming about!