Have you ever gone to a car dealership without really thinking through your budget and knowing what you can afford? While there are many online calculators, including Royal’s calculator for how much car you can afford, we understand that you might need a little help exploring your loan options. When you get preapproved for a car or truck loan at Royal Credit Union, you’ll get a much clearer idea of your loan rate, payment, and overall vehicle budget. Getting preapproved for an auto loan at Royal means you take almost all the steps to apply for a loan without picking your vehicle.
A preapproval will also give you the opportunity to ask questions and get advice from a Royal expert. We’ll share the pros and cons of getting preapproved for an auto loan at Royal to help you decide if getting preapproved makes sense for you.
Auto Loan Preapproval Pros: Make An Informed Loan Choice
An auto loan preapproval at Royal Credit Union means you go through the loan application process without having a specific vehicle in mind. You’ll set a planned budget for your truck or car purchase, choose a loan term that makes sense for your needs, and leave the preapproval process with a firm estimate of your monthly payment for your chosen loan term and amount.
This might sound exactly like using any other online loan calculator, but when you get preapproved at Royal, we’ll go a step further and pull your credit to ensure you qualify for the loan amount and term you’ve chosen. Because loan rates can vary based on your credit score, having your credit pulled will help us get your best loan rate so we can calculate a more accurate payment. This extra step also allows you to lock in your vehicle loan rate for the next 60 days, even if you haven’t found the perfect car or truck yet.
Because a Royal expert will be reviewing your credit information, we’ll also be able to answer all your loan and credit questions. If you’ve been thinking about consolidating debt, refinancing an existing vehicle loan, or comparing payments for several different loan amounts and terms, we’re happy to help!
Our team members also aren’t trying to sell you a vehicle in a dealership setting – we’ll cover every aspect of your potential loan and make sure you understand the information we share. It might not be as exciting as a test drive, but by getting preapproved, you’re likely to know all the details of your vehicle loan and have a much better idea of what you can qualify for before even stepping onto a dealer lot. That can mean fewer surprises and more peace of mind as you complete the transaction with the dealer.
Auto Loan Preapproval Cons: Preapprovals Take Time
The main drawback to getting preapproved for a car or truck loan is that the process is an extra step. Royal is typically able to offer same-day preapprovals, but the process isn’t quite as spontaneous as just deciding to visit a dealership and making a purchase on a whim. Even if you explain that you’re preapproved with Royal Credit Union, auto dealers may ask you to complete an additional loan application for their part of the process, so getting preapproved may not save you time at the dealership.
Another item to consider when deciding to get preapproved before vehicle shopping is the potential credit impact. If you do complete a second loan application at the dealership, it will most likely result in a second credit pull. If this credit pull takes place within 14 days of your initial loan application with Royal, it should not affect your credit score.
Is An Auto Loan Preapproval Right For You?
The result of a successful vehicle purchase is the same whether or not you get preapproved. You’ll leave the dealership with a new truck or car and a copy of your loan information. Royal will provide detailed loan and payment instructions within the next 30 days. The difference is in the details when you get preapproved: you’ll already know that you’re qualified for the loan you’ve chosen, and you’ll even know your actual loan rate.
It’s up to you to decide if the extra step of getting preapproved is worth it. If you know you have excellent credit and a flexible budget, getting preapproved could take more of your time without many benefits. You’ll already expect to get a good rate on your loan and have an idea about what payment is affordable for you. In this situation, you could consider just heading to the dealership and having them process your loan on the spot.
On the other hand, if you think you might have trouble sticking to a set budget in a high-pressure sales environment, a preapproval can give you a hard limit to avoid having your finances stretched too far. It can also help get the dealership sales team’s attention: a preapproved buyer has done their homework and most likely is serious about making a purchase in the near future. Lastly, a preapproval is a great way to get your questions answered by someone who isn’t being paid to make the sale.
Hopefully this information helps explain the vehicle loan preapproval process at Royal Credit Union. If you’re interested in getting preapproved for a car or truck loan, you can complete our online loan application and indicate that you have no collateral selected yet.