Answer: That’s correct -- if you want to make your life easier (not to mention save money) then getting preapproved is a great idea.
When you get preapproved, you find out whether or not a lender is willing to work with you. They’ll tell you how much you can borrow -- so you know how much you can afford to spend. They also quote an interest rate and monthly payment, which tells you how much it costs to borrow and what you need to budget for.
Learn more about what happens when you get preapproved and how to do it.
You’re also in a better negotiating position after getting preapproved. You have already jumped through a few hoops with a lender, and the lender is willing to make a loan. This means you don’t have to negotiate monthly payments with a dealer or hold off on making a decision. Sellers will be more comfortable knowing that if you want to you can get the money and get the deal done.
Preapproval is a way to shop lenders. You can check with banks, credit unions, online lenders, and your auto dealer. With a loan offer already on the table, you can decide whether or not to use financing available at the dealer.
Getting preapproved is not terribly difficult -- you’ll need to work with a lender at some point anyway -- and it can help you get the best deal on your next car.
