Get preapproved for a car loan

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6 providers that offer preapproval on car loans

How preapproval works on car loans

With car loans, preapproval works by allowing you to lock in the rates and terms on a car loan before heading to the dealership. It draws out period between getting approved for a car loan and signing the loan documents.

Unlike preapproval on other types of loans, auto loan preapproval typically requires a full application, documents and a hard credit check.

4 tips to help get preapproved for a car loan

Consider these four tips before you submit a preapproval application:

1. Create a budget. Before you begin, calculate your potential monthly payments and learn how much you can afford. This can help guide you toward lenders that offer preapproval options you may qualify for.
2. Check your financial standing. Car loans are an expensive commitment. Be sure that a loan is something you can realistically fit in your budget and understand your credit score before you apply for preapproval.
3. Research your car. Having a car already in mind when you apply for preapproval can help — it gives the lender something to go by when determining whether or not to offer you a loan.
4. Shop around. Not every lender offers the same car loan. Seek preapproval from multiple lenders to increase your chance of qualifying for a loan.

What are the advantages of preapproval for car loans?

• Increased confidence. The lender assessed your finances and gave you the green light to purchase a vehicle, so you don’t have to stress about securing financing.
• Bargaining power. Knowing how much you can spend gives you the upper hand when negotiating a price at the car dealership.
• Fixed interest. A fixed interest rate can help you maintain a budget without having to worry about fluctuations in the market raising your interest rate.
• Increases loan options. Because you’ll already have a loan, you won’t be stuck with whatever financing package you’re offered. Preapproval can protect against dealership markups.
• Avoid upsales. Preapproval gives you a specific amount you have to spend. When the salesperson tries to upsell you with GAP insurance or an extended warranty, you’ll know if you can afford it.

5 reasons to get preapproved before hitting the dealership

Why might I want to hold off?

• Short approval time. Auto loan preapproval is often only available for between 30 and 60 days. If you’re not ready to finance a car within the month, you should wait to apply for preapproval.
• Limited budget. Because you’ve been preapproved for a set amount, your car options may be limited. This can be beneficial if you don’t want to overspend, but it might restrict which models you can get.
• Smaller market. Not all lenders offer preapproval, and some might still require a hard credit check — even before you’ve accepted the loan.

Should I get preapproved for a car loan?

It depends on your situation. You might want to get preapproved for one of the following reasons:

• You’re new to lending. Getting preapproved can give you an idea of what type of loan you can actually get without the commitment.
• You want to negotiate. Going to a lender with a preapproved rate in hand is key to making a solid case for yourself.
• You aren’t set on a dealership. Having a preapproved car loan effectively makes you a cash buyer. If you don’t like one dealer is offering, you can move on to the next.

How to get preapproved for a car loan in 5 steps

You can apply for an auto loan online, in person or over the phone, depending on your lender.

1. Get a copy of your credit score.
2. Ensure you have all your personal documents and income information.
3. Compare a range of loans that you can apply for.
4. Fill out one or more preapproval applications with multiple lenders.
5. Shop around for your next car.

What happens after I get preapproved?

After you get preapproved for a car loan, most lenders allow you to shop around for around 30 days to find the right car. Some might offer preapproval for as long as 60 days.

Once preapproved, lenders typically give you a check that you can use to buy a car at a dealership or with a private party. You aren’t obligated to sign off on the loan if you decide to go with another lender or not make the purchase at all.

Compare more car loan options

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Name	Product	Filter Values	Minimum credit score	APR	Loan term	Requirements
PenFed Auto Loans			Varies	Starting at 1.04%	Up to 10 years	Active membership with PenFed	Low APR car loans from a well-known credit union.	Go to site More Info	Compare	loading Fetching your data...
Carvana			No minimum credit score	3.9% to 27.9%	Varies	18+ years old, annual income of $4,000+, no active bankruptcies	Get pre-qualified for used car financing and receive competitive, personalized rates.	Go to site More Info	Compare	loading Fetching your data...
car.Loan.com Car Loans			300	Varies by network lender	Varies by lender	Must be a US citizen with a current US address and employed full-time or have guaranteed fixed income.	Apply with a simple online application to get paired with a local auto lender. No credit and bad credit accepted.	Go to site More Info	Compare	loading Fetching your data...
CarsDirect auto loans			No minimum credit score	Varies by network lender	Varies by network lender	Must provide proof of income, proof of residence, and proof of insurance.	Save time and effort with this lending service specializing in beginner-friendly or subprime car loan.	Go to site More Info	Compare	loading Fetching your data...
Auto Credit Express Car Loans			300	Varies	Varies	Must be employed full-time or have guaranteed fixed income of at least $1,500/month and be a current resident of the US or Canada.	Get connected with an auto lender near you, even if you have bad credit.	Go to site More Info	Compare	loading Fetching your data...
Monevo Auto Loans			500	3.99% to 35.99%	3 months to 12 years	Credit score of 500+, legal US resident and ages 18+.	Quickly compare multiple online lenders with competitive rates depending on your credit.	Go to site More Info	Compare	loading Fetching your data...
LendingTree			Good to excellent credit	Starting at 3.09%	Varies by lender	18+ years old, good to excellent credit, US citizen	Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out.	Go to site More Info	Compare	loading Fetching your data...
myAutoloan.com Car Loans			550	1.79% to 27%		550+ credit score, no open bankruptcies, $24,000+ annual income, US citizen or permanent resident, 18+ years old	Get up to four offers in minutes through one simple application. Multiple financing types available including new cars, used cars and refinancing.	Go to site More Info	Compare	loading Fetching your data...

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Bottom line

Getting preapproved for a car loan can be helpful for buyers who want to negotiate with a dealer or are willing to shop around for a car. But since not all lenders offer preapproval on their car loans, it could limit your options. Check out our guide to car loans to ensure you’re making the right moves when buying your next car.

Frequently asked questions

• Does preapproval affect car loan interest rates?

  Yes, preapproval can affect car loan interest rates in two ways: It allows you to learn what rate you can qualify for and gives you a tool to help negotiate a lower rate with a lender.

  For example, say you were preapproved for 11% APR. You can walk into a dealership and offer the salesperson 8%. They might come back with 9% or 10%.

  Preapproval isn’t a commitment, so if the dealership can give you a lower rate, take it. If you can’t get a better deal, you can walk away or find another dealership that can — or stick with the original loan.

• Is preapproval available for everybody?

  It depends. Generally, you’ll have to be at least 18 years old, a permanent resident or citizen of the US, have a regular income and be able to afford your loan repayments. Many lenders also require that you meet a certain credit score requirement.

• Does preapproval guarantee I'll get a car loan?

  Generally, yes. Preapproval means you are able to shop for a car. While it’s not guaranteed, the lender has likely already performed a hard credit check and analyzed your finances to confirm you qualify.

• What is conditional approval for a car loan?

  Conditional approval is given before preapproval on your car loan. Based on the information you give the lender, you’re given a maximum loan amount. You’ll have to wait to get information like loan term and interest rates. Unconditional approval is when the lender approves you for the loan to buy a specific car.

• Where can I buy a car with a preapproved car loan?

  Preapproved car loans can be used at a dealership, with a private sale or at an auction.

• Will getting preapproval hurt my credit?

  Not necessarily, but it could cause a temporary dip. If you end up getting multiple preapprovals from different lenders with hard credit pulls, your credit score could be affected. However, most credit bureaus now consider multiple applications for the same type of loan as one line, so your score may not decrease significantly.

• After I'm approved for an auto loan, are there restrictions on where I can shop?

  Some lenders will have no restrictions as to where you can buy a car, while others work with a network of dealerships. Check with your lender if it has restrictions in place.

• How long does my preapproval last for?

  Each lender will have a set period of time for how long your pre-approval stays in place for. While this varies, it is usually around 30 days.