How does a preapproved car loan work?
I’m about to get a new car just dont know what yet. Want to get the loan today because Friday Im going to go look. Want the money with me so I can buy it on the spot.I know for a regular car loan they ask for a VIN number.If I get a preapproved loan and dont use all the money that is on the loan how would i use or return it?
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Some banks pre-approve you for a certain amout and the dealer works with that bank directly; not too many banks give you a blank check with a certain cap off amount. Stick to your bank, dealers always want you to sign up with their banks, i think you end up paying for more. When you walk up to a dealer pre-approved for a certain amount, its like walking in with cash so you can negotiate since they dont have to pre approve you. Go to a Credit Union they have better interest rates than banks do. Good luck.
for the capitalone pre-approved loan it works like this
1) you apply for the loan for a certain amount (which is for more money that you actually need), for example $25,000
2) once you get approved you will get a check in the mail that you can use at the dealer
3) you negotiate for the price of the car, and you write that amount on the check, say $21,000.
whatever you right on the check becomes your loan amount, and you pay it off based on the interest rate and loan length that you were pre-approved for.
Once you have negotiated the price, you might want to ask the dealer what kind of financing deals they have. When I bought my car I had a capitalone preapproved loan, but I ended up not using it, because the dealer was able to beat the interest rate by 1%, with the same terms
The bank won’t hand you money because they don’t have the security of their name on the title yet. The bank will authorize you up to a certain amount. The dealer will deal with them for the financing. The bank will want to know what you are thinking about – like used car, new car, brand, etc.
Warning. Don’t tell the dealer you have financing. They count on the kickback from the bank they like to use. They are willing to take less for a car if they think they are getting someting back you don’t know about. Sometimes it not a monetary kickback but they get a lower rate on the loans they use to buy the cars for the showroom and the lot if they give a certain amount of business to the bank.