Auto loan pre-approval is a process in which a lender evaluates a borrower’s creditworthiness and determines the maximum amount they are eligible to borrow for an auto loan. Pre-approval provides borrowers with an estimated loan amount and interest rate before they start car shopping, allowing them to have a better understanding of their budget and negotiate with car dealers from a stronger position.

To obtain an auto loan pre-approval, a borrower typically needs to provide their personal and financial information to the lender, such as their income, employment status, credit score, and debt-to-income ratio. The lender will review the information and determine the maximum loan amount and interest rate that the borrower qualifies for.

Auto loan pre-approval is a valuable tool for car buyers as it helps them to save time and money by allowing them to shop for vehicles within their budget. It also gives them the confidence to negotiate with car dealers from a position of strength and potentially secure a better deal on their auto loan.