So how exactly does a pre-approval work?
A pre-approval for a car loan works similar to that of any other type of personal finance approval process. Firstly, the buyer either approaches the bank or lender to apply for finance, or they use an online application form.
Just like any other loan approval process, the bank or lender will need to do a thorough credit, employment, and financial check to ensure that you are able to make the repayments required. They may also require additional documentation to verify their identity.
The biggest difference between other loans and a pre-approval is the fact that the money is not available straight away. The application will be given conditional approval for a limited time for the borrower to find a vehicle and for all parties involved to come to an agreement. The time period for the conditional approval is at most a couple of weeks.