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29 Nov 2023
If you’re searching for a new car, a pre-approved car loan could put you in the fast lane and save you a lot of money.
So, what is a pre-approved car loan and how do you get it? Let’s take a look.
A pre-approved car loan is when your lender agrees in principle to lend you a certain amount of money to buy a car, subject to credit approval and an invoice from the dealership.
The main reason to get car loan pre-approval before going to a car dealership is to strengthen your position when negotiating with the dealer. It is difficult to play hardball when you are depending on the dealer for car loan approval! If you know your budget and are buying a car with a pre-approved loan, you can bargain with more confidence.
Depending on where you are in your car buying journey, you can do any or all of the following:
Find out how much you can afford to pay for a car using our car loan calculator. It only takes a minute to get an estimate.
Complete an online car loan application and then arrange a call with one of our experienced lending managers. A credit check will be run during the online car loan application process. Once an assessment has been made, we will provide a pre-approval. Later, this makes it easier to get approved for a car loan online.
The credit enquiry is placed at the time of application and has nothing to do with the lending manager speaking to the applicant.
You can get pre-approved for a car loan on the same day, and get final approval within two days. The overall car loan processing time, from application to settlement, takes 3-4 days.
Our minimum loan amount for a private vehicle is $5,000 and our maximum loan is $100,000. For a business vehicle, the minimum is $5,000 and the maximum is $150,000. The amount you can be pre-approved for will depend upon the vehicle purchase price and your financial circumstances.
Pre-approval is a conditional approval based upon the information received at the time of issuance. It is not a guarantee but is an important part in the car loan process. Unconditional approval will be provided once all documentation has been received and a final credit assessment has been conducted.
When you go car shopping, you already know how much you can borrow and what the regular repayment will be.
If you shop around and get pre-approved in advance, you will be able to compare and get the best value finance.
With your pre-approval in hand, you’re in a stronger position to haggle.
You can use your pre-approval as an easy way to deflect add-ons and extended warranty offers by saying you are only pre-approved for a lesser amount.
There is no obligation to proceed should your circumstances change and there is no out of pocket cost incurred. Only if you proceed to get a loan will you be charged a car loan application fee.
Because you aren’t reliant on dealer finance you can negotiate on price with confidence knowing you can easily walk away and buy elsewhere.
Pre-approval gives you a clear price range before you start shopping which helps you to narrow down your options quickly and prevents you being upsold by the dealer.
Some things to consider:
Each time you apply for pre-approval a credit check is conducted, so if you get pre-approvals from multiple lenders it can affect your credit score. To avoid this, shop around first and only get pre-approval from your preferred lender.
Pre-approval is only valid for a limited time, generally 30 - 90 days depending on the lender.
Yes, you can apply here.
Once you have been pre-approved the next step is to provide your supporting documentation for the final car loan approval process.
This will include:
Once the vehicle has been secured, we will contact the dealership and obtain an invoice for the vehicle.
At that time, a final assessment will be conducted and a final approval granted. You will then receive an electronic copy of your loan contracts to be signed and returned. We will then pay the loan funds to the car dealership directly. You are then free to drive away!
What is the step by step application process at loans.com.au ?
That depends on the lender. Pre-approvals usually last for at least 30 days but at loans.com.au they are valid for 60 days. This window gives you an opportunity to find the car you want and agree to purchase.
Read: How long does car loan approval take?
You can get a pre-approval for all car loans offered by loans.com.au . This will include approvals for a certain-aged vehicle. This includes both new and used cars.
Yes you can. For a five year loan term we offer up to a 30% balloon on new cars and up to 20% for used. We offer higher amounts for shorter term loans.
Yes but the age of the car is a consideration in how much you can borrow. The oldest vehicle we will lend for is 15 years at the end of the loan term.
As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.