How to get a pre-approved Car Loan?

Pre-approved car loans are a hidden gem. When used correctly, they can help you buy your favourite car and save money

Borrowers can use a pre-approved car loan to buy a new car. Pre-approval for a car loan can get you a better deal on your car, saving valuable money. Therefore, you should try to get pre-approved for a car loan before buying a car.

Lenders offer pre-approved car loans to borrowers who meet specific lending requirements. In a pre-approved car loan, the lender gives the borrower pre-approval for a certain amount of money, along with an estimate interest rate. Borrowers can use the pre-approved loan offer to hunt for their favourite car. Here are a few ways to become eligible for pre-approved car loans.

How to get a pre-approved car loan?

Pre-approved car loans are a privilege. They are available only to specific borrowers, although you can join them if you:

Have a good credit score

Your credit rating determines whether you will receive a pre-approved car loan offer. Lenders look at your credit rating and history to determine if you have the right repayment appetite. A good credit score can help you get an offer at attractive interest rates. Hence, work on your credit score. Pay your EMIs timely and ensure you never miss a payment, even by a single day.

Use your credit card wisely

A credit card is a valuable tool if you know how to use it. A credit card can protect you in emergencies and provide financial backing whenever you are short on money. However, non-payment of credit card dues can land you in debt. Credit card interest rates are higher than regular loans, so your bills can rise if you miss the deadline.

Have decent savings or current account balance

Before sending a pre-approved car loan offer, lenders also evaluate your savings or current account balance. If you have a decent amount of funds, it can help you get a car loan interest at affordable rates. Therefore, ensure that your savings or current account is always well-funded.

Have been with the bank for a long time

Long-time customers of a bank are more likely to get a pre-approved car loan offer. If you have had an account with a bank for a long time, ensure that you prudently use that bank’s account. Keep the account well-funded and ensure you have a steady bond with the bank. It could help you seal a pre-approved car loan offer.

What to do if you have a pre-approved car loan offer?

If you already have a pre-approved car loan offer and want to buy a car, you should exercise the privilege. You can speed up the process by preparing the following list of documents:

• Information on employment
• Government recognised ID
• Information on revenue
• Amounts of unpaid debt (student loans, home loans, etc.)
• Documents related to taxes

Also, if you have been approved for a car loan from a particular lender, chances are you will receive similar offers from other lenders. Hence, do not go ahead and buy a car using the first pre-approved loan offer you get. Accumulate offers and choose the one that suits you the best.

Established institutions, such as IDFC FIRST Bank, offer the most affordable pre-approved car loans. With IDFC FIRST Bank, you can also utilise the offer to grab a car loan online. The bank’s instant loan app makes the car loan application simple and easy.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.