Why You Should Pre-Qualify for A Car Loan
Here are the best reasons why you should prefer pre-qualification over pre-approval prior to getting a car loan.
Currently shopping for a car? While you may be focused on finding the perfect car, you should also spend time focused on finding the best car loan. While most loan providers require you to complete a car loan application before they’ll give you your car loan rates, there are some companies like Carzing that will allow you to pre-qualify instead. This allows you to view your car loan rates without hurting your credit score or completing a full application.
Getting pre-qualified allows you to get a sense of what interest rates you’d get, as well as what your monthly payment might be. Getting pre-qualified is different than getting pre-approved. A pre-approval involves a hard inquiry and usually requires a more in-depth application. Therefore, a pre-qualification is generally more advisable.
“Getting pre-qualified is different than getting pre-approved.”
Why Get Pre-Qualified for a Car Loan
With a pre-qualification, you ensure that you don’t incur a hard inquiry on your credit report.
Hard inquiries are applied by lenders whenever you apply for a loan from them. A single hard inquiry could negatively impact your score and stay on your record for up to two years. A hard inquiry could lower a credit score by as much as 50 points.
You may not be fully aware of it but any deduction of points from your credit score may pose a significant impact on your credit standing. A loss of even a point could possibly affect your qualification for a car loan with low APR. You have to always make sure your credit score is within the acceptance threshold for specific credit tiers. Top-tier credit standing always qualifies for the lowest interest rate, while fair, average, or good scores correspond to rates that are not as attractive.
“Any deduction of points from your credit score may pose a significant impact on your credit standing.”
How to Get Pre-Qualified for a Car Loan
Fortunately, there are now a few websites that offer pre-qualification for car shoppers. Generally speaking, getting pre-qualified takes just a few minutes and doesn’t require a credit score inquiry, meaning it won’t negatively impact your score. Our car loan pre-qualification service takes less than a minute and allows you to see your monthly payment and interest rate options.
“Getting pre-qualified takes just a few minutes and doesn’t require a credit score inquiry, meaning it won’t negatively impact your score.”
The idea is to provide you a preview of your car loan rate and to find a what car payment works for your budget. You can print out the pre-qualification certificate and then head on to the car dealership so you can enjoy a faster, hassle-free car purchase transaction. Try our pre-qualification service here.
If you need more assistance with your car purchase, be sure to contact our team at [email protected]!