While buying a car, cost and time matters. While searching for a new vehicle in the market with an auto loan, trying to get a pre – approved auto loan is both time and money saver. Following are a few reasons why you should take a pre – approval process.
Leveraging While Dealer Negotiations
The primary benefit of a pre – approved loan is the leverage because when you already have the guarantee of a pre-approved loan, it gives you a higher ground while bargaining with the dealer. The dealer gets the fact that as a buyer, you are a serious prospect and you have the required financial power to make the purchase as the lenders are already lined up behind you to provide the money. With already the resources secured to make the purchase, with your interest and persuasion, it is more likely for the dealer to cut you a deal, that might be by reducing the cost of the car or by adding some value added extras or by reducing some paperwork charges involved in the transaction. Without a pre – approved loan, it becomes very difficult for a person to make any kind of negotiations with the dealers because there remains no guarantee of a sure shot purchase of the car.
Lower Rate Of Interest
Secondly, with a pre-approved loan you can not only negotiate with the dealers but also have the upper hand against the lenders. As pre – approval of loans are only given to people with low risk factors, that creates a firm image in front of the lender and you can negotiate with the lender to lower the interest rate on the loan.
Acquiring More Buying Power
With the security of the financial muscles for buying the product in your hand, you can step in the showroom with all the confidence of a cash buyer. With a meticulous research done beforehand, you must be absolutely sure what you want and if you stick to that, you can purchase it at the instance. While choosing the finance partner through the seller always will tempt you to go for some additional features which may burn a hole in your pocket, so knowing exactly how much you will need and how much you will spend will always safeguard you from overspending.
Creating A More Realistic Budget
Customer dealing with the history of a bad credit also needs to opt for pre – approved loans because it shows them a clearer picture of their finances and of their budgets whether it will be feasible for them to opt for a car or not. Upon knowing the exact interest rates that one needs to pay for the auto loan, it is much easier to figure out the total cost of the loan as well with the help of a number of calculating tolls available online. Why it’s so important if you are having a poor credit history is because a bad credit means usually a higher interest rate which will trickle down to the fact that you have to adjust your budget in a tighter fund reserve. If $10,000 was affordable with a 9% APR, with a higher APR of 20%, you may be able to afford only $8000 because of the steep monthly payments. While having bad credit, a realistic budget creation is very crucial because the last thing you will want is to default on an existing loan ending in repossession of the vehicle. So, getting a pre – approved loan and creating a logical budget on the basis of the expected APR ensures that you will be paying the monthly payments at ease.
Test Driving and negotiation may take a long amount of time even if you have pre-planned the entire process and you know which car you want to purchase. Getting a pre – approval not only helps you to save a few hundred bucks but also it ensures that you save a lot of time. Unless you try to heckle with multiple dealers for a competitive interest rate, pre – approval gets your job done without you having to run to different offices worrying about pay stubs. All you need to do is to sign in the forms and walk away with your purchase.
So, while you’re at thinking about buying a new asset, prove your smartness and get your pre – approval loan sanctioned at the earliest and save money and save time!