Car Loan Quote: Pre-Qualification versus Pre-Approval

Many borrowers believe that they are guaranteed car modifications loan offers you receive when you first talk to a lender. However, this is not always true. Your quote can be changed depending on whether they are pre-approved or pre-qualified. This article explains the difference between these conditions:

Pre-qualified

When you are prequalified for a loan, this means that the information you have sent to the lender, not you fit the qualifications for a loan. Being prequalified is very general, usually does not even require a credit check or proof of income. You answer some basic questions about your income and credit worthiness and loan company to decide what is right for you based on your answers. Being pre-qualified loan quote does not provide. In fact, it is likely that supply will change if the lender pulls your credit report.

Pre-approved

If you pre-approved for your loan, this means that you have taken all of the loan process, except to choose a machine and signing of contracts. Before the quotes are generally guaranteed for a specified period - usually 30 days. To get pre-approved for a car loan, the company will have to pull your credit report and have proof of your income. However, once your lender pre-approved loan you simply have to find a car. Lender will consider certain things about the car you choose, such as its value. They will then forward contracts, fill them, and you own the car.

Most borrowers receive pre-qualified for a loan when they are still comparing lenders. If you have decided on a lender, there is no reason not to go ahead and get pre-approved. This can also make a better rate if interest rates rise before making your purchase.