How does a pre-approval for an auto loan work?

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I’m trying to get a newer car and every website for research told me I should have this before I go to a dealership. I got a “conditional approval” back and it says that I will need a purchase order that includes all info on car. Well how am I supposed to purchase the car without having the actual loan first?

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Anonymous 0 Comments

Pre-approval or conditional approval is just that – it is the lender telling you that unless something is _very_ wrong with the deal, you are approved for a loan of $X at Y% interest. With the preapproval, you go to the dealership, negotiate the price of the car, and then send the invoice along to your lender. They will then work with the dealership to finalize the loan and send the dealer the money to purchase the car.

Dealers deal with preapprovals all the time. Just tell your salesperson you have preapproval and their finance team will help you through the paperwork.

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