5 Tips for Getting Pre-Approved for Financing

February 26, 2021
5 Tips for Getting Pre-Approved for Financing

Getting pre-approved for a car loan is an important way to understand how much money you can borrow from your bank. Instead of searching for a car and then getting pre-approved, having it already done when you go into the dealership will let them know you mean business. Here are five tips for getting pre-approved to purchase your own car. 

Credit Score

Checking your credit score before getting pre-approved will help you understand what kind of loan you can expect. Ranging from 300-850, a good credit score is anywhere between 600 and 750. With this information in mind, you’ll be able to gauge if you will be approved or not. You can review your score on your banking app, or on any credit bureau. 

Have All Necessary Documents Ready 

Getting a pre-approved loan isn’t usually an instant process. It may take up to 24 hours, and even so, there is a lot of preparation. The lender you’re seeking out may request your SIN number, your income and employment status, and a government-issued ID such as your driver’s license. Your lender could request other documents as well depending on their requirements.  

Shop Around 

Don’t get discouraged if you don’t get approved by a certain lender. Some banks and credit unions have their own rules, and they can range in qualifications. Plus, even if you do get approved by one bank, you can still shop around and see what deal is best for you in the long run. 

Form a Budget 

The last thing you want to do is overshoot when creating a budget. Once you get pre-approved, make sure you create a realistic budget that includes taxes, and maybe some add-ons that you are thinking about. You may want to include items like insurance, new tires, and any other expenses you may need. 

Consider Your Options 

When buying a car, you have several options. Maybe it’s your first car and you don’t have one to trade in. It could be your fifth car and you just need an upgrade. Your options are endless… within budget, of course! 

Once you have your pre-approved amount, you can do your research and seek out your options. Will you buy a brand new model? Or a 5-year-old used car? It’s ultimately up to you, and what fits into your budget with some wiggle room. 

If you still have questions on the process of getting pre-approved for financing a car, contact Seaway Hyundai for more information and advice.