back to articles | August 11, 2019 | Greg Thibodeau

Categories: Tips & Insights For Car Buying Auto Loans & Financing Loan Calculators & Rates Types of Car Loans Vehicle & Buying Research

A Pre-Approved Car Loan Is The First Step

At first, acquiring a car loan from the dealership seems like the most convenient way to get the job done. However, what many people do not realize is that the business manager, who arranges the financing, may be working on commission. He or she is in the business of selling loan packages, insurance and various add-ons. The convenience may end up costing you a lot of money.


How the process works is, the business manger sends your credit information to various potential lenders; he or she uses the lowest interest rate, adding a mark up. The mark up does not have to be disclosed and may be substantial. The savvy buyer ends up negotiating the loan terms in the same manner he or she negotiated the vehicle’s price.

Before you start shopping for your next car, you would be well advised to first shop for your car financing. Decide what is for you an affordable monthly car payment. Once you know what you can afford, you need to find a vehicle that is priced within your budget and the interest rate on your car loan. You can find many tools to assist you at

When you apply for a car loan, your potential lender takes many things into consideration. The most important is your credit rating. Before completing a loan application you should go to tools section of the website, where you can obtain a free TransUnion credit report. If you find incorrect information that has the potential to influence the interest you will be charged, you will want to clear up the inaccuracies before submitting a loan application.

There are other influences that have a bearing on the interest rate a lender may offer. A higher interest rate is charged on older vehicles. Furthermore, the shorter the term, the lower the interest rate, but you will also pay higher monthly payments. Geographic location also influences interest rates. Online lending is a competitive business and lenders want to offer the best interest rate possible.

It takes between three and five minutes to fill out the loan application. Upon completion, within seconds, you might receive as many as four lender offers. Do not wait until you are at the dealership to apply for a loan. Instead, go into the dealership well prepared. Know how much you can pay for your car and have your pre-approved loan in hand.

Although banks and credit unions are helpful and will not try to sell you what you cannot afford, their hours of operation can be limited. If it is possible to utilize their services online, to secure more than one quote, you would need to go to more than one website. An online financial service, such as can render up to four lender quotes.

Although competitive car loans are offered by most online financial institutions, some do not offer personal service and a few have poor reputations. Lenders working with ensure that consultants are available to answer customers’ questions, either via a 1-800 line or by email. Moreover,, since 2004, has been an A+ member of the Better Business Bureau, and has so far provided service to l.5 million customers.