How to get car loan pre-approval

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.

Pre-approved car finance

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.

Why get pre-approved before going to a 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.

What are the steps to get pre-approved?

Depending on where you are in your car buying journey, you can do any or all of the following:

Calculate your repayments

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.

Get car loan pre-approval

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.

How long to get pre-approved for a car loan?

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.

How much can I be pre-approved for a car loan?

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.

Does pre-approval guarantee a car loan?

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. 

What are the benefits of having pre-approval?

Helps you set a realistic budget

When you go car shopping, you already know how much you can borrow and what the regular repayment will be.

Get a cheaper interest rate

If you shop around and get pre-approved in advance, you will be able to compare and get the best value finance.

Strengthen your negotiating position

With your pre-approval in hand, you’re in a stronger position to haggle.

Avoid upselling

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.

No obligation

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.

Increase your confidence

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.

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Can I apply for a car loan online?

Yes, you can apply here.

I got pre-approved for a car loan now what?

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:

• A copy of your driver’s license
• Payslips
• Bank statements

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 ?

• Apply online
• Speak to a lending manager and obtain pre-approval (where applicable some customers can obtain final approval straight from applying online, before speaking to a lending manager)
• Provide supporting car loan application documents  
• Sign a purchase contract for a vehicle with a dealer
• We will contact the dealership and obtain an invoice
• Final car loan approval will be granted
• We issue loan documents and you sign them and return
• We will pay the funds to the dealership
• You drive away

How long does pre-approval last for?

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?

FAQs

What are the finance options for pre-approved car loans?

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.

Can you get pre-approved for a car loan with a balloon payment?

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.

Can you buy a used car with a pre-approved loan?

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.