Car Loan Pre-Approval Before Going into a Dealership

With so many car models, hundreds of cars in the lot, and pricing structures that aren’t always easy to understand, a trip to the car dealership can be stressful.

Sure, a car finance calculator is going to help relieve some stress by showing you what car loan rates you can afford, but that’s not all that’ll help.

Getting pre-approval for a car loan prior to your visit can make the entire process feel less overwhelming.

If you’re in the market for a new car, getting pre-approved is a smart first step. While the process is simple and takes less than five minutes, many people overlook pre-approval and instead focus on finding the best deal at the dealership.

This, unfortunately for most, can be a mistake that lands borrowers with high car loan rates that aren’t affordable.

Even if you have bad credit, car loan pre-approval is the smart way to shop for a car.

So, here’s everything you need to know about getting pre-approved.

What is Car Loan Pre-Approval?

Car loan pre-approval is a preliminary evaluation of potential borrowers that determines maximum loan amounts and car loan interest rate estimates.

This doesn’t mean that you are committed, nor guaranteed, to specific loan terms. Instead, it is simply a way to better understand your possible loan options.

Once you know have an estimate of your rates, you’ll have a clearer picture of the type of car you can afford.

Here’s how the pre-approval works at LendingArch:

  1. You fill out a short online questionnaire
  2. Hit “submit”
  3. A qualified loan expert sends you car loan options

Unlike most applications, there’s no credit check with LendingArch. This means that there won’t be a hard inquiry on your credit.

Our loan experts believe that you’re more than just a number. Because of that, we look at your complete financial picture and provide you with auto finance options accordingly.

LendingArch provides car loan pre-approval for potential borrowers with any credit score.

Pre-Approval Now, Rewards Later

In the rush of day-to-day life, it’s easy to lose sight of the big picture.

For example, if you need to buy a car, it’s tempting to focus on the details of the car – the make, model, year, etc.

But there’s a big problem with focusing on car aesthetics and features. Unlike considering your personal finances and making a responsible decision, these things are much more appealing.

When it comes to buying a car, nothing is more important than your finances. Why? Because the amount you can afford to pay will ultimately determine everything else. Even the color of car you can buy. (Did you know that some car colors can cost more than others?)

By prolonging the hardest part of the process – the finances – you’re actually making the entire car-buying experience more stressful. This is why prior to stepping in a car dealership, you should get pre-approval for a car loan.

Alongside this process, take advantage of a car finance calculator for a better idea of what car payments you can afford.

How to Prepare for Pre-Approval

Car loan pre-approval is a relatively simple process that only takes a few minutes. But the application you have to fill out will ask for specific information.

Remember, pre-approval is in no way an agreement on auto loan terms. It simply gives you a rough idea on what terms to expect when you actually take out the loan.

This is a very important step, particularly for potential borrowers who:

In any of those cases, qualifying for good car loan rates can be a lot more difficult. To prepare for getting pre-approval, here’s what you’ll need.

Employment and Income

Most lenders will ask about your current employment and income. You’ll need to input your current job type (full-time, part-time, or unemployed) and how much you earn each month.

If you don’t earn a consistent level of money, enter the average amount you’ve earned over the last 12 months.

Driver’s License

Your driver’s license allows the lender to confirm that you’re the age of majority in the province you live.


You’ll also need to enter your address. This will be used to determine which dealerships are in your area and the interest rates they have on offer.

Down Payment

During the car loan pre-approval process, you’ll be asked to estimate your car loan down payment.

You’re not required to provide a down payment. However, even a few hundred dollars can significantly reduce the cost of your car throughout the term of the loan.

A larger down payment also ensures that you’ll never be “upside down” on your car loan or owe more than the car is worth.

What Happens After I’m Pre-Approved?

Once you have submitted your initial application through LendingArch, you’ll be contacted by one of our loan specialists. They will ask you a few additional questions to help you find the best car loans in Canada.

After that, you’ll be directly connected to a financing specialist from a dealership so that you can complete the loan application process as soon as possible.

The dealership will be in your area and a specialist will be able to help you complete the car loan process.

Speaking with a financing specialist from a dealership doesn’t mean that you have agreed to a loan. You’re simply doing more research on what your car financing terms will look like.

Speaking to a dealership’s financial specialist doesn’t secure loan terms. Instead, it gives you more details regarding what your car financing terms will look like.

Keep in mind that getting pre-approved for a car loan and finding a dealership to work with you is important. Regardless of your credit, this process is easier with LendingArch.

Keep in Mind…

Here’s the deal – car loan pre-approvals typically have an expiration date. So if you’re happy with your estimated loan amount and car loan interest rate, it might be time to start searching for a car that’s suited to your needs.

That said, don’t rush yourself into a purchase. Instead, take your time and evaluate your monthly budget to ensure you can afford to add auto loan payments. When doing this, you might find it useful to use a car finance calculator.

As overwhelming as the car-buying process can be, a pre-approved car loan will make it easier.

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