If you’re in the market to buy a car, you don’t want to go through all of the work of finding the right vehicle only to find out you can’t get financing for it—or worse, that you can, but you can’t afford the monthly payments after you bring it home.
If you take the time to get pre-approved first, you can solve both of these issues and more. We’ll show you how to get pre-approved for a car loan in just a short amount of time.
A car loan pre-approval means that you’ve submitted a preliminary application with the lender and received conditional approval on an auto loan. The lender will do a hard credit check and review your financial documents and information during this process, and if approved, you’ll be issued an offer letter; you can then choose whether or not to proceed with a full application. Pre-approval is not a guarantee of approval, but it means you have a good chance.
How to Get Pre-Approved for a Car Loan
As long as you take a few minutes to get things in order, it’s actually very easy to apply for pre-approval on a car loan. Here are the steps you’ll need to take.
1. Gather Information and Documents
Most lenders require the same information. Rather than finding this piecemeal as you go, take a few minutes to gather these details. Write down key bits of information, and round up any documents into one ready-to-go file that you can send to the lender.
You’ll generally need the following details:
- Date of birth
- Email address
- Phone number
- Social Security number
- Recent addresses and length of residency
- Total amount of monthly or annual income, plus any additional income sources
In addition, you’ll need the most recent copies of the following documents:
- Pay stubs
- Tax returns
- Bank statements
- Driver’s license or other official photo ID
2. Collect Pre-Approval Offers
You wouldn’t pick the first car you see while you’re out shopping, and the same goes for your auto loan too. That’s why you should shop around for the best loan, and to do that, you’ll need to apply for pre-approval with several lenders. The more lenders you get pre-approved with, the better your chances of getting the best possible loan.
Since pre-approvals can trigger hard credit inquiries that damage your credit score, make sure to get all of your rate shopping done within a short period. All auto loan hard inquiries within a period of 14 or 45 days, depending on the model used, will only count as one inquiry. So, check your offers quickly to preserve your credit score as much as possible.
We recommend setting aside a bit of time to do this. It only takes about a few minutes to apply for pre-approval with each lender, which you can usually do online. To keep all of your offers straight, take notes on the following details from each lender’s offer letter:
- Loan rates
- Loan expiration date
- Maximum pre-approval amount
- Any limitations such as mileage or age restrictions, or requirements to buy from certain dealerships
3. Go Car Shopping
Once you have a few offers to choose from, pick the one with the best rates. You can use this as a literal bargaining chip if you print it out and bring it with you to shop for cars at a dealership. When you find your car, show the offer letter to the car salesperson and ask if they can offer you a better deal on car financing or even the purchase price of the car itself.
Make sure to find the car you want to buy before your pre-approval offer expires, typically within 30 to 60 days. Otherwise, you’ll have to apply for pre-approval all over again and the rates may have changed.
Best Car Loan Rates
|Lender||New APR*||Used APR*||Refinance APR*|
|AUTOPAY||2.99% and up||2.99% and up||2.99% and up|
|Consumers Credit Union||5.24% and up||5.24% and up||5.49%–8.54%|
|LendingTree||4.75% and up||4.75% and up||1.80% and up|
*APRs are accurate as of publication.
See how we chose the top car loans here, along with picks in other categories:
Benefits of Car Loan Pre-Approval
It’s true that getting pre-approved for a car loan adds a few extra steps. But in return, you’ll gain some important benefits that’ll smooth out and de-stress your car-buying experience.
- Get the best loan: You’ll be able to choose which loan works best for you, rather than being at the mercy of the dealership. That can save you a lot of money.
- Easier to dodge upsells: Salespeople have all kinds of tactics up their sleeves to boost your costs if you shop based on your monthly payment amount. But if you take the focus off that and look at the car price itself, you’ll be better able to say no to those upsells.
- Speed up the car purchase: You spend a lot of time in the dealership financing office when you’re ready to buy a car. But if you’ve already got a loan lined up, you can cut that time in half.
- More financial peace of mind: If you get pre-approved first, you know whether you’re likely to be approved or not, exactly how much it’ll cost you, and whether that fits into your long-term budget.
You can compare your car loan pre-approval offer to your budget to find out exactly how much car you can safely afford—which is usually much less than the maximum loan offer.
Auto Loans: Pre-Qualification vs. Pre-Approval
“Pre-approval” and “pre-qualification” sound redundant, and for some types of credit, they’re basically the same thing. But for auto loans, they have very different meanings.
Getting “pre-qualified” means that a lender has done a soft credit check and a basic examination of your financial situation. It’s not as in-depth as a “pre-approval,” where a lender does a more thorough scope. A pre-approval typically requires a hard credit check, and the lender will ask for more information and documents.
If you’re pre-approved for a loan, it’s a more certain thing than getting pre-qualified. But it’s still not final until you find the car.
How to Increase Your Odds of Approval
Getting pre-approved can help prepare you to get the best car loan. But in turn, there are a few things you can do to get prepared for the pre-approval itself:
- Check your credit: Check both your credit score and your credit reports. This lets you know what you need to work on, gives you time to fix any errors, and gives you an idea of what types of lenders you might qualify with.
- Save up a down payment: The more you can save first, the smaller the loan you’ll need. That saves money, but it may also increase your approval odds if you don’t need to borrow as much.
- Pay down credit card debt: Lenders use your debt-to-income ratio to help calculate how much you can borrow. Paying down credit card debt saves money, boosts your credit score, and may allow you to qualify for a larger loan.
- Pay any overdue balances: It’ll be hard to get approved for any loan if you’re late on any debt payments.
What to Do After Pre-Approval
After you get pre-approved for an auto loan, you’re ready to go car shopping. Remember to bring your best pre-approval offer with you so you can try to negotiate better financing when you find the right car.
In some cases, the lender will send you a blank check when you get pre-approved for an auto loan. The idea is that you bring this with you when you’re out car shopping so that when you find the car you want, you can write a check right then and there up to the limits of your pre-approval offer.
Learn more about buying a car, and check out our picks for the best used car websites to save some time in your search.
Where Can You Get Pre-Approved for Auto Loans?
Many different types of lenders offer auto loan pre-approval. Check with your own bank first and with any local credit unions in your area. After that, check with other banks and credit unions you may qualify with, as well as online auto lenders.
What Credit Score Do You Need to Get Pre-Approved for Car Loans?
There is no set minimum credit score you’ll need in order to get pre-approved for a car loan. Each lender has its own internal threshold, and they don’t often make this number known. In general, you’ll stand the best chance of being approved by any lender if you have good or excellent credit.
Is It Hard to Get Pre-Approved for a Car Loan?
The difficulty of getting pre-approved for a car loan depends on your financial situation and the lender you’re applying with. It’ll be harder to get pre-approved for an auto loan if you don’t have good credit and consistent income. In terms of the work required, applying for pre-approval on a car loan isn’t too hard. You’ll need to round up some financial documents and information, but the pre-approval process is much the same between lenders and only takes a few minutes.
Does Pre-Approval Guarantee a Car Loan?
No, getting pre-approved for a car loan doesn’t guarantee that you’ll get the loan. If the car you pick out doesn’t fit within your lender’s requirements, you won’t be able to get a loan from that lender. You could also be denied if your lender finds additional information about your finances that disqualifies you from getting a loan as they’re doing any last-minute checks before final loan approval.
Consumer Financial Protection Bureau. “Take Control of Your Auto Loan.”
Kelley Blue Book. “Does Checking Your Credit at a Car Dealership Impact Your Score?”
Consumer Financial Protection Bureau. “What Effect Will Shopping for an Auto Loan Have on My Credit?”
PenFed Credit Union. “Getting Pre-Qualified vs. Pre-Approved for Auto Loans.”
Edmunds. “How to Get Preapproved for a Car Loan.”
Experian. “Prequalified vs. Preapproved: What’s the Difference?”
Experian. “Step-by-Step Checklist for Buying a New Car.”
Experian. “What Credit Score Do I Need for an Auto Loan?”