Before you begin the search trail for your dream car, it’s always suggested to get pre-approved for an auto loan. Apart from acquiring the best interest rate possible on your car loan, pre-approval also puts you in a more powerful position when negotiating with the dealer.
Pre-approval surely makes things easier for car buyers. However, getting pre-approved in itself is quite a task. Here is how you can get pre-approved for the car you’ve been planning to buy for a long time.
1. Chalk out a feasible budget:
It’s always beneficial to keep a track of how much money you will require and at what interest rate. The cost price should preferably be less than what you’re actually approved for. This is because additional costs like taxes and fees amount to about 10 percent of the loan. It’s important to ensure that your aggregate car payment pertains to your budget.
2. Keep a track of your Credit Score:
It’s essential to be well-versed and up-to-date with your credit score report. Your credit score plays an important role in determining the best possible rates for your car loan and the total amount of loan you should be entitled to. It also takes into account your age, educational qualifications and employment period. When you know your credit score in advance, you get the leverage of choosing your financing sources and where you should apply for car financing.
3. Work out your car loan application:
Once you get all the facts right regarding your application for the car loan in advance, things will go as per the plan. Generally, you’re asked to provide basic information like driver’s license number, name, address, date of birth and so on. However, it’s the financial information which plays a vital role in getting you pre-approved i.e. your credit card balance, debts and the name of the bank where you have opened your savings account. Also, it’s crucial to provide employment and income related information such as your employer’s name, your jobs for the past 5 years and the rate at which you are paid.
4. Compare and analyse offers:
A good credit score invites plethora of options for you to choose from to get you pre-approved for a car loan. Before you finalise on any loan option, it is important to ask questions and get your doubts cleared. If one lender offers loan at a better rate than the lender you’re more inclined towards, then choose the former. Or take the first lender’s offer to the second one and negotiate with them to strike a deal along the same lines.
5. Proper documentation of income:
In order to get yourself pre-approved for a car loan, it is necessary to provide them with your income details for verification purposes. The information to be provided in the application should state your gross monthly and annual salary. Also, provide financial institutions with the details of your income, which includes your latest salary cheque or the details of your tax returns in case you’re self-employed.
Once you get pre-approved for an auto loan, then buying a car will not be much of an inconvenience. Whether certified used cars or brand new Volkswagen vehicles, we at Volkswagen Financial Services provide car finance to make your journey towards your dream car smoother. If you want to save yourself from the hassles that come between you and your car, we are just one click away!