How a pre-approved car loan could fund your post lockdown vehicle purchase

young woman sitting in her vehicle bought with pre approved car loan

Been holding out to buy a car once post-lockdown? Well, it may be time to think about getting pre-approved for a car loan.

Not only could this speed up the process of buying a new or used vehicle, it can give you the peace of mind that you have already been approved for lending from a car loan provider. 

Plus, it can give you a better idea of what car prices you can go for as well as how far you need to go if it comes to negotiating the price. 

But what is car loan pre-approval? 

Car loan pre-approval is when a lender conditionally agrees to loan you money before you purchase a vehicle.

Note the word ‘conditionally’. This means that the loan isn’t set in stone, rather the lender sets conditions in order to fully approve the loan for the purchase of a car. Conditions may include things like loan limits and vehicle types. 

It’s also important to remember that pre-approvals only last for a certain amount of time before they expire - in Australia that’s usually around one to three months. 

So with this in mind, if you are planning to go car shopping post-lockdown it may be a good idea to have a look online and see what’s available within your price range right now. That way you will have done your research and won’t waste time once you’ve been pre-approved. 

Do pre-approvals affect credit score? 

Like all lending, pre-approvals can impact your credit score. The golden rule when applying for a loan or pre-approval is not to make multiple applications at once. Other lenders and tax reporting agencies may see this as a negative. 

Remember, to be granted pre-approval on a car loan you need to have a healthy credit rating as it gives a potential lender the indication that you are a trustworthy borrower. So if your credit score isn’t looking good right now, it may be worth focusing on repairing it by paying off your current debts, before seeking out more forms of credit.   

So wait, does pre-approval guarantee a car loan? 

As mentioned, in the case where a borrower receives pre-approval, there is no guarantee of a car loan. 

Some of the reasons someone may not receive lending after pre-approval: 

  • The pre-approval period has expired 
  • The car they are looking to purchase is too expensive (above the pre-approved loan amount)
  • The lender doesn’t cover a particular vehicle type

How do I apply for car loan pre-approval? 

First off, you’ll have to find a lender that offers pre-approval, as not all of them do. 

Once you have, like a normal car loan application, the lender will assess your finances and check over things like your credit history, transaction and savings accounts as well as your employment status. That way, the lender will be able to determine how much they think you can afford to repay over the life of the loan. 

If you receive pre-approval on a car loan, you will then be provided with funds to make a vehicle purchase. 

Ready to start comparing car loans? Have a look at these options or head to our car loan hub for even more!

Compare car loans - last updated 21 May 2022

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  • New Car Loan - Prime Special

    Home Owner Discount, Including Demo, Variable, Secured

    Interest rate
    comparison rate
    Monthly repayment
    3.24% p.a.
    3.78% p.a.based on $30,000
    over 5 years

    Low variable car loan rate for purchasing new and demo vehicles from dealers. Extra low 2.99% rate (3.53 comparison rate*) for qualifying homeowners. Personalised loan amounts between $5,000 and $100,000. Flexible repayment options. Choose between the 3 to 5 year loan terms.

    Repayment terms from 3 years to 5 years. Representative example: a 5 year $30,000 loan at 3.24% would cost $32,935.97 including fees.

    Details
  • Car Loan

    Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    5.35% p.a.
    5.65% p.a.based on $30,000
    over 5 years

    Available for all New and Used cars up to 7 years. A quick and easy, 100% online application with loans up to $75,000. No printing. No paper. No fuss. No monthly account keeping fees, no exit fees and no early repayment fees.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 5.35% would cost $34,507.61 including fees.

    Details
  • New Car Loan - Prime Special

    Home Owner Discount, Including Demo, Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    5.09% p.a.
    5.64% p.a.based on $30,000
    over 5 years

    Eligible for homeowners only. Low fixed car loan rate for purchasing new and demo vehicles from dealers. There is no monthly or ongoing fees and early payout options available. Winner of Mozo's Experts Choice Car Loan 2021 award^.

    Repayment terms from 3 years to 5 years. Representative example: a 5 year $30,000 loan at 5.09% would cost $34,442.49 including fees.

    Details
  • Car Loan

    Fixed

    Interest rate
    comparison rate
    Monthly repayment
    5.99% p.a.to 10.29% p.a.
    6.54% p.a.to 10.86% p.a.based on $30,000
    over 5 years

    Enjoy competitively low rate car loans from 4.89% (comparison rate 5.44% p.a.) between $10,000 and $100,000 for new, demo and used vehicles. Take advantage of flexible 3, 5 or 7 year loan terms. No early repayment or exit fees. You must be 21 years or over to qualify and earn above $35,000.

    Repayment terms from 3 years to 7 years. Representative example: a 5 year $30,000 loan at 5.99% would cost $35,189.67 including fees.

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  • Used Car Loan

    Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    6.24% p.a.
    6.94% p.a.based on $30,000
    over 5 years

    Enjoy a quick application process and no monthly fees on NRMA used car loans. Finance also available motorcycles, caravans and motorhomes. Low fixed interest rates with terms of up to seven years. Plus, NRMA Blue Member benefits apply so you could enjoy even lower rates as an NRMA Member**.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.24% would cost $35,499.27 including fees.

    Details
  • Used Car Loan

    Dealer Only, Up to 5 years old, Fixed, Secured

    Interest rate
    comparison rate
    Monthly repayment
    6.59% p.a.
    7.14% p.a.based on $30,000
    over 5 years

    Used Car Loan with no monthly or ongoing fees, with a fixed rate for the life of the loan. Fast online application.

    Repayment terms from 3 years to 5 years. Representative example: a 5 year $30,000 loan at 6.59% would cost $35,695.00 including fees.

    Details

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