When you’re shopping for a car, having cash in your back pocket is a powerful thing. It gives you the freedom to buy any car you like, and gives you the ability to negotiate a better deal.
But how can you get these benefits with a vehicle loan?
Some lenders offer auto loan pre-approval, allowing you to secure financing before you even step foot in a car dealer or start browsing TradeMe.
Keep reading to learn more about what pre-approved car loans are, their benefits, how to get one, and important considerations to keep in mind.
What is a Pre-Approved Car Loan?
A pre-approved car loan is a loan that a lender agrees to grant you based on your financial situation, credit history, and income, typically before you choose a vehicle.
The lender assesses your creditworthiness and provides you with a lending limit and terms, allowing you to approach the car-buying process with a clear understanding of your financial capacity.
It means when you start looking for a car, you know exactly how much you have to spend, which makes it much easier to find a suitable vehicle.
How much can I borrow?
When you get auto loan pre-approval from Loan Direct, you can borrow up to $75,000, with interest rates starting at 11.95%.
Want to know what your repayments would be? Try our free online loan calculator to find out!
The Difference Between Secured and Unsecured Car Loans
There are two main types of car loan: unsecured and secured loans. Loan Direct’s pre-approved auto loans are unsecured, but what does this mean?
Unsecured car loans
An unsecured loan means the lender simply gives you an amount of cash to spend as you like, with no conditions attached.
This flexibility allows you to shop around for the best deal on your preferred vehicle without being tied down to a specific model or dealer. You also have the advantage of negotiating like a cash buyer, which can often lead to better purchase terms.
While interest rates are a bit more than for secured loans, the added freedom makes it worth it for many people.
Secured car loans
With a secured loan, the car itself is used as collateral against the loan. This offsets some of the risk to the lender because they can take back the car if you fail to repay the loan.
You can also get lower interest rates with a secured car loan, reflecting the reduced risk to the lender.
The downside of secured loans is that the car you want to buy needs to be approved by the lender before you buy it. This slows the process down and also removes your ability to negotiate as a cash buyer. You also get less freedom to choose your car.
Benefits of Pre-Approval
Getting pre-approval for a car loan offers numerous benefits that can significantly enhance your car-buying experience.
Budget Clarity
Knowing the amount you can borrow helps you set a realistic budget for your car purchase. This prevents overspending and allows you to narrow down your options effectively. It also alleviates some of the financial pressure associated with buying a car. With your financing settled ahead of time, you can focus on finding the perfect vehicle rather than stressing over how to pay for it.
Enhanced Negotiation Power
When you’re armed with a pre-approved car loan, you approach the dealership or private seller with confidence. Since you have a clear idea of your budget, you can negotiate as a cash buyer, which often allows you to secure a better deal. By showing that you’re financially backed by a lender, sellers may be more willing to make concessions on price or offer additional incentives to finalise the sale.
Streamlined Process
When you find the right car, having a pre-approval speeds up the loan processing time. You won’t have to wait for financing to be approved after you select a vehicle. Pre-approval can streamline the purchasing process by eliminating some of the complexities often involved in securing financing. When you find the right vehicle, you can act quickly because you already have your financing in place. This agility can be especially beneficial in competitive markets where desirable cars can sell quickly.
Total Freedom
Unlike some car loans, which require the vehicle to be approved before the lender will sign off on the purchase, with a pre-approved loan you can buy whatever car you want, from wherever you want! This means that you have the flexibility to explore a wider range of options, whether you’re considering a new vehicle from a dealership or a used car from a private seller. You won’t be restricted by a list of approved vehicles, giving you the freedom to find your dream vehicle.
How to Get a Pre-Approved Car Loan
With Loan Direct, getting pre-approved for a car loan couldn’t be easier. We’re all about speed, so we work lightning quick to get you sorted.
To start, simply apply using our super quick loan application form – it takes just 2 minutes!
We’ll be in touch to get some more details from you and then we’ll get to work finding you the best deal.
Loan Direct is an online finance broker, which means we put your application in front of multiple lenders.
More lenders means more chances of approval! It also means more competitive loan rates, as we use our extensive network of low-cost lenders to get you a better deal.
This process also gives you better loan options, as you can choose the one that works best for you.
We can usually arrange loan approval within 1-2 hours*, and payout the money the same day*.
We’re fast because our fully online process means no pesky paperwork to fill out. You don’t even have to send in your bank statements – we review those via our secure online portal.
By drawing on the latest technology and the expertise of an experienced lending team, we make it happen.
*Subject to responsible lending criteria.
Can I Get a Pre-Approved Car Loan with Bad Credit?
If you have bad credit, it’s possible that we can arrange a car loan for you.
Bad credit is not a deal breaker for us, and Loan Direct works with customers who have poor credit history to get back on track.
If you have regular income and can make your loan repayment as per the loan agreement, there’s a good chance you could be approved for a loan.
However, depending on your financial situation, a pre-approved car loan may not be right for you. Instead, a secured car loan may be the best option.
To discuss your situation, get in touch with our friendly team to find out how we can help.
Why Choose Loan Direct
Loan Direct specialises in fast, simple loans, with highly competitive interest rates.
We’ll take care of all the legwork for you, and together with our lending partners, we’ll secure the best deal that fits your needs.
- Easy online application
- Flexible loan terms from 6 months to 7 years
- 100% paperless process
- Unsecured loans from 11.95%*
- Secured loans from 9.95%
- Approval in just 1-2 hours*
- Same day payout
In addition to vehicle loans, we specialise in personal loans, debt consolidation loans, emergency loans, home renovation loans, and much more!
*Subject to responsible lending criteria
