Pre-approved car loans work in different ways depending on the lender that is issuing the credit offer. Some send you an offer in the mail, but only mention the top amount you can be approved for, then in the fine print they mention that the offer is subject to credit approval. Others offer a variety of terms. Here are a few of the pre-approved offers that you may run into.
Existing Bank, No Specific Vehicle
Some large subprime lenders are offering pre-approved car loans to current customers. Capital One is famous for trying to upsell credit card holders by offering pre-approved auto loans, but they are not alone. These offers work like a blank check in a sense. You will apply for the loan (you do not need to have a specific car in mind). The lender will consider your creditworthiness, then send you a check for the maximum amount that they will lend you. You fill out the remainder of the loan paperwork after you find a car. The catch is that the check is only accepted by dealers who are affiliated with the program. There are also mileage, age, and minimum loan amounts to deal with. Your loan will only be for the amount that the dealership writes on the check and the paperwork that they send back to the lender.
Traditional Loan, Specific Vehicle in Mind
Another type of pre-approved auto loan that is common is that you have a type of vehicle in mind, including year and approximate mileage, then go to a lender for approval. You may even have the VIN in hand. You can find these loans online or at your local bank. These are traditional loans, but you are skipping the financing that is offered by the dealership.
Online Pre-Approval, No Specific Vehicle
Lastly there is the type of auto loan pre-approval we offer here at Keystone Auto Loans. This is when you want to get pre-approved for financing from a dealer or lender in your area, without dealing with the hassle of an in-person, handwritten application. We place your application with a lender or dealer who is willing to fund your loan, based on your income, location, and credit profile. You do not have to have a specific vehicle in mind, but you may have to purchase your new or used car or truck from an affiliated dealership. This is a particularly beneficial service for people with subprime credit, as you can eliminate the need to apply at several different locations, and you can walk onto the dealer lot with the confidence of pre-approval. Learn more here.
Ready to secure your approval? Go here to apply online.