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Get preapproved for a car loan

Up your bargaining power before heading to the dealership.

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Matt Corke
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Walking into a dealership with a preapproved loan allows you to lock in rates and terms on a loan before shopping for a car. However, it can limit how much you’re able to spend on your new car.

6 providers that offer preapproval on car loans

LenderHow long preapproval lastsAPRTermsEligibility
myAutoloan.comVaries by lender1.89% to 550+ credit score, no open bankruptcies, $24,000+ annual income, US citizen or permanent resident, 18+ years old
Go to site
LendingTreeVaries by lender0.99%1 year to 7 years18+ years old, good to excellent credit, US citizen
Navy Federal Credit Union60 days1.79%15 yearsCredit union member, US citizen or permanent resident, have age of majority.Read review
Bank of America30 days2.09%1 year to 6.25 yearsAges 18+, US citizen or permanent resident, buying eligible vehicleRead review
Capital One30 days3.24%3 years to 6 yearsValid street address, existing Capital One account in good standing, buying 2009 model or newer with less than 120,000 milesRead review
USAA45 days1.89%1 year to 7 yearsUSAA member, US citizen or permanent resident, ages 18+Read review
CarFinance.com30 days4.99%6 yearsAge 18 years or older, credit score 500+, to refinance loan car must have less than 100,000 miles, no more than eight years old and loan balance must be $7,500+Read review

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.

Features of car loans

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.

Preapproval vs. prequalifying

When it comes to car loans, preapproval is technically not the same as prequalifying — though some lenders might use the two term to refer to the same process.

Preapproval involves a hard credit check that temporarily lowers your credit score and gives you more power at the dealership.
Prequalifying involves a soft credit pull. It’s helpful when comparing lenders, but it won’t give you leverage for negotiating a price.
  • Tip: If a lender advertises “locked in rates,” it’s talking about preapproval, not prequalifying.

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

Data updated regularly
Name Product Filter Values Minimum credit score APR Loan term Requirements
Carvana
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
car.Loan.com Car Loans
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
CarsDirect auto loans
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
Auto Credit Express Car Loans
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
Monevo Auto Loans
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
LendingTree
LendingTree
Good to excellent credit
Starting at 0.99%
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.
More Info
myAutoloan.com Car Loans
myAutoloan.com Car Loans
550
Starting at 1.89%
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
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Compare up to 4 providers

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.

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