It looks like you're using an outdated browser.
For a better experience, we recommend switching to a more modern browser like Google Chrome or Microsoft Edge. Learn more.
Online Banking Login

News & Tips

How Do Auto Loan Pre-Approvals Work?

Whether you’re looking to buy a small bug or a big truck, it’s always exciting to start a journey with a new ride. It’s a good idea to explore your financing options before shopping for vehicles online and hitting the dealership floor to gear you up better for car-buying success, which usually begins with an auto loan pre-approval from a credible lender like Space Coast Credit Union. In this article, we’ll cover the nuts and bolts of how auto loan pre-approvals work! 

Learn more about auto loan pre-approvals at SCCU

Auto Loan Pre-Approval vs. Pre-Qualification

What is an auto loan pre-approval?

A pre-approval means that you provide the lender with your personal and financial information along with your permission to do what’s called a “hard credit pull” so that they can give you information about how much money they’re willing to issue to you for a car loan along with interest rates for various loan terms—often in the form of a letter. The “hard credit pull” involves the lender looking at your credit file to determine your “creditworthiness” and how “risky” it would be to issue money to you. 

Unfortunately, a hard credit pull usually follows with credit reporting companies docking you a few points on your credit score. But, if you make multiple hard inquiries in a two week period, it won’t affect your credit score as much because they’ll only count as one inquiry. So, it’s best not to start applying for auto loan pre-approvals until you’re more serious about buying a car within a month from receiving that greenlight first. 

Does pre-approval guarantee a car loan?

Keep in mind, this offer doesn’t guarantee funding, but it’s more of a sure thing than a prequalification.

What is an auto loan pre-qualification?

A pre-qualification involves a “soft credit pull,” which does not affect your credit score. In this case, the lender would only give you a ballpark figure of the loan amount you’d qualify for, which helps you in the beginning stages of the car-buying process because you can get that estimate without hurting your credit.  

Dealerships typically won’t take pre-qualifications as seriously because it doesn’t demonstrate that you can secure financing with as much certainty as you can with an auto loan pre-approval.

Why get an auto loan pre-approval vs. going to the dealership?

An auto loan pre-approval in hand can help reduce the guesswork for purchasing a car and also offers you more leverage at the dealership (and hey, maybe even more confidence and peace of mind). So, let’s take a closer look at why it’s a good idea to get an auto loan pre-approval: 

1) Helps you set your auto loan budget.

The word “budget” may send chills down your spine, but it’s important to determine your expectations for what kind of car you can buy. Once your lender has approved you for a certain loan amount and interest rate, you can better calculate what loan term works best for you based on how much you can budget for your monthly auto loan payment. Plus, once you know what you qualify for, you can narrow down your vehicle options more realistically to fit within that price range. 

Our auto loan calculators can help you explore what works best for your financial needs. Here, you can experiment with various down payment amounts, trade-in values, loan terms, etc. You can also see what you’d be paying in interest for the life of the loan.

When you buy any car, we recommend subtracting 10% from the loan amount to account for the full “out-the-door price,” which involves the sales price of the vehicle plus taxes, registration fees, title fees, documentation fees, extra features, and other financial products. Dealers may try to upsell the deal with add-ons, so knowing your loan amount in advance can help you keep sellers in check with what you can realistically afford. 

Estimate Your Vehicle Payment¹




"I purchased a vehicle very recently and SCCU had the BEST interest rate of all other financial institutions." 

Mike V.

2) Gives you negotiation power

No doubt about it, an auto loan pre-approval can set you up with more sway at the negotiation table when it comes time to talk shop. Since you’ve already done the hard part of getting the interest rate you can qualify for, knowing this amount will help you avoid the possibility of a dealership marking up an approved rate they would offer you, which could cost you a lot more in the long run. 

Make sure you do your research beforehand to estimate your trade-in amount (value of your old car) to help you get the best deal and reduce your loan amount. 

3) Widens your range for dealership choices

Last but not least, an auto loan pre-approval in hand means you’re not tethered to one dealership’s financing terms. With an offer from SCCU, you can shop at any dealership in Florida and find the best car for your money. If you decide to take care of your financing at the dealership instead of getting a pre-approval auto loan letter beforehand, be sure to ask for SCCU!

How long are auto loan pre-approvals good for?

A car loan pre-approval at SCCU is good for 30 days. If you need an extension beyond that time, give us a call and we’ll see what we can do. One of the best parts? You can apply online for free! Not to worry, you can also decline a car loan pre-approval if it’s not for you.

If you’re an educator, first responder, military member, medical professional, or law enforcement professional, be sure to take advantage of our Hero Auto Loan discounts!

How to Buy a Car with a Pre-Approved Auto Loan

Now to the main event. We’ll break down how auto loan pre-approvals work step by step with some helpful tips sprinkled in too.  

1) Check your credit report.

You can go to to look at your credit reports from the three credit reporting bureaus: Experian, TransUnion, and Equifax (for free once a year). If you notice any errors, you can reach out to them for corrections. This will help avoid any surprises when it’s time for a pre-approval. 

The credit reports won’t show your FICO® Score, which is what many lenders use. At SCCU, you can check yours for free in your Online Banking account. What’s the minimum credit score you need to get an auto loan? In most cases, you’ll need a minimum credit score of 661 to qualify for an auto loan. The higher your credit score, the lower your interest rate. 

If you’d like to improve or build your credit, this article provides numerous helpful tips.

2) Define the monthly auto loan amount that works best for you.

The best place to start is with a budgeting spreadsheet like this one that identifies your total monthly income and expenses to see what you can comfortably afford for your auto loan monthly payment. Then, with your estimated trade-in value and down payment, you’ll have an easier time calculating your monthly loan amount, like comparing a 60- vs. 72-car loan term, in our auto loan calculator.

3) Gather personal and financial documentation.

Pump the brakes, don’t apply for a pre-approval just yet! First, get your ducks in a row with your documentation to ensure that you have everything you need (and because some information may take longer to obtain than others) to be prepared. Some documents you’ll need include:

  • Government-issued identification
  • Social Security number
  • W2s or other income verification 
  • Proof of employment status
  • Proof of assets 

4) Find the best auto loan lender for you.

Take a look at a few auto lenders’ websites to evaluate and compare auto loan rate ranges and qualifications. Hint hint, credit unions usually have the best auto loan rates in your area because they exist to serve members, not shareholders. 

You can also give auto lenders a call to see if their loan offerings would specifically work for your financial needs. Ask them if they do any auto loan pre-qualifications so you can get an idea of what loan amount you’d get before you jump in with an auto loan pre-approval application. 

Once you’ve selected your top lenders, then it’s time to apply for an auto loan pre-approval. Then, review the loan amount, rates, terms, and estimated monthly payment on the pre-approval letter. See our essential guide to car loans to learn more about what to look for in a lender.

Auto Loan Purchase Interest Rates

Effective Date: June 01, 2024
Apply Now
Payment Period Purchase APR* "As Low As" Minimum Loan Amount Payment per $1,000
Up to 36 Months 6.24% No minimum loan amount $30.53
Up to 48 Months 6.49% No minimum loan amount $23.71
Up to 60 Months 6.74% $10,000 $19.68
Up to 66 Months 6.99% $10,000 $18.29
Up to 72 Months 7.24% $12,000 $17.16
Up to 75 Months 7.49% $15,000 $16.74
Up to 78 Months 7.74% $20,000 $16.36
Up to 84 Months 7.74% $20,000 $15.46

Rates shown are fixed Annual Percentage Rates for vehicle model years 2024 and newer. Rates are subject to change. Your actual rate and terms are affected by your creditworthiness, term selected, vehicle type, and model year. Certain restrictions apply. You may be asked to furnish a down payment. Florida loans are subject to Documentary Stamp Tax. The tax amount is not included in the quoted APR.

5) Shop around for a car that suits your financial needs.

Now that you have your letter and terms, you can better compare used or new car options online (CarMax, Carvana,, hit dealership floors, take some cars for a drive, and close the deal within that auto loan pre-approval letter timeframe. Here are our top tips for buying used cars. Then buckle up for some fun in your new ride!

Auto Loan Pre-Approval | Space Coast Credit Union

At SCCU, you can expect low auto loan rates for new and used vehicles8, fast approval decisions, and flexible terms9. If you meet our qualification of living or working in one of these counties, but you’re not a member, not to worry! You can still apply for an auto loan at SCCU, and we’ll set up your membership for you (with a $5 deposit to a share savings account, which fun fact, makes you a shareholder at SCCU). You can easily apply online or in a branch. Have any questions? Feel free to contact us via one of our many methods that work best for you. 

Why December is the Best Time to Buy a Car
December 1, 2023 By Space Coast Credit Union
In fact, it's one of the best times. Here's why.
Personal Loan vs. Auto Loan: Which is Right for You?
June 29, 2023 By Members' Watchdog
While generally an auto loan makes more financial sense, your situation may call for a personal loan. In this article, we’ll cover the pros and cons of each type of loan to help you decide.
What is Auto Loan GAP Insurance?
May 17, 2023 By Space Coast Credit Union
Find out what auto loan GAP insurance is, along with when and why it can be a real life saver.
The Florida Financing Guide to Motorcycle Loans
April 10, 2023 By Space Coast Credit Union
Whether you’re looking at buying a new or used motorcycle, this guide will cover all you need to know about financing one in Florida.
Car Loan Pre-Qualification vs. Pre-Approval: What is the Difference?
January 27, 2023 By Space Coast Credit Union
You may like to get a good sense of what you can afford, and financial institutions can help with that—by either pre-approving or pre-qualifying you for a certain dollar amount for the car loan.
How to Buy a New Car
October 28, 2022 By Space Coast Credit Union
See our step-by-step guide on how to buy a new car. Plus, we provide some expert tips to help you save while buying your new ride!
The Essential Guide to Car Loans: Everything You Need to Know
July 28, 2022 By Space Coast Credit Union
This is the ultimate guide to auto financing to help you get the best car loan at the best rate. Plus, we sprinkle in helpful tips about refinancing, GAP insurance, and more.
How Soon Can You Refinance a Car Loan?
June 9, 2022 By Space Coast Credit Union
If you’re unhappy with your current auto loan, you’re probably wondering how soon you can refinance to get a better deal.
Florida Guide to Financing an RV for Less
May 9, 2022 By Space Coast Credit Union
If you’re ready to make a used or new purchase for RVs, motorcycles, or boats, then you’re in the right place to learn more about getting the financing you need for your fun. 
How Do Auto Loan Pre-Approvals Work?
March 22, 2022 By Space Coast Credit Union
It’s a good idea to explore your financing options before shopping for vehicles to gear you up better for car-buying success, which usually begins with an auto loan pre-approval from a credible lender like SCCU.
60-month vs 72-month Auto Loan Comparison (+ the Pros and Cons of Each)
January 14, 2022 By Space Coast Credit Union
If you feel like you’ve come to a fork in the road while deciding between a 60- or 72-month auto loan, you’ve come to the right place. We're covering the pros and cons of both in this post to help you make a final decision.
Is it a Good Idea to Refinance Your Car Loan?
November 18, 2021 By Space Coast Credit Union
In many cases, people save more money in the long run after refinancing and end up with a better monthly auto loan payment. However, many other factors play a part in determining if it’s a good idea to refinance your car loan.
Tips for Applying for a Used Car Loan
October 26, 2021 By Space Coast Credit Union
Once you’ve decided to purchase a used car, here are seven steps you can take to streamline the process and help you get the best deal.
The Florida Financing Guide to New and Used Boat Loans
October 5, 2021 By Space Coast Credit Union
If you dream of enjoying the Florida waterways in a sailboat, powerboat, motorboat, cabin cruiser, or other boat type of choice, here’s what you should know about financing and the boat loan process. Fortunately, the purchase process is easier than you might think. We’ll take you through the entire process to help you find the best boat loan for you. 
How to Refinance a Car (+ When to Do It)
September 2, 2021 By Space Coast Credit Union
Refinancing a car involves replacing the current loan on your vehicle with a new loan that typically has more agreeable terms. This can take place with your current lender or with a different one. To help you navigate this process, we’re sharing the pros and cons of refinancing a vehicle, the steps involved in refinancing, and when it makes sense to do so.
Is it Better to Buy a New or Used Car?
August 20, 2021 By Jodie Kinley-Smith & Duane Daski
We’re in a strange economic time right now with many dealers having an extreme shortage of inventory due to a chip shortage. Chips, or semiconductors, play an essential role in managing vehicles’ safety devices, engine functions, and more. Because of the pandemic, U.S. automakers had to close factories to slow the spread of the virus and cancelled chip orders, expecting fewer people to buy. 
What are Common Car Loan Terms?
August 5, 2021 By Space Coast Credit Union
Do you feel like your brain’s dissolving into Jell-O as you’re exploring car loan repayment periods? It can feel overwhelming as you’re weighing the pros and cons between short-term and long-term loans. Common car loan terms usually range between 24 and 84 months—but which one is right for you?
How to Make Your Loan Payment
April 1, 2021 By Space Coast Credit Union
SCCU’s loan payment process is designed to be as quick and convenient as possible, saving you two of the things you care about most – time and money.
SCCU’s Five-Minute Guide to Buying a Boat
March 12, 2020 By Gary Prager
Summer is here and there’s no better time to enjoy Florida’s great outdoors.
SCCU’s Five-Minute Guide to Buying an RV
May 11, 2017 By Space Coast Credit Union
There’s a lot to know before you set foot on a lot. The more you research now, the better things will go.
Leasing Vs. Buying a Car
February 8, 2017 By Space Coast Credit Union
The decision to lease or buy a car is a personal one. Don't let the dealer make it for you.
7 Things to Do Before Your Next Road Trip
July 1, 2016 By Tim Alexander
One of life's greatest pleasures can be a summer road trip to your favorite vacation destination.

APR = Annual Percentage Rate
¹CALCULATOR: The information provided by these calculators is intended for illustrative purposes only and is not intended to purport actual user-defined parameters. The default figures shown are hypothetical and may not be applicable to your individual situation. Be sure to consult a financial professional prior to relying on the results.
²TERMS: Terms available up to 84 months for auto loan purchases and auto loan refinances, up to 240 months for boat and RV loan purchases, and up to 72 months for motorcycle loan purchases and are based on your credit quality, vehicle type, model, and year. Our usual credit criteria apply. Your term may be different. Qualified borrowers only.
³RATES: Rates are subject to change. Rates shown are fixed Annual Percentage Rates and are affected by your credit quality, model year, term selected, loan-to-value (LTV), and payment method. Your rate may be different. Qualified borrowers only. Our usual credit criteria apply. You may be asked to furnish a down payment. Rates shown for auto purchases/auto refinances are fixed Annual Percentage Rates for vehicle model years 2024 and newer. Rates shown for motorcycle purchases are fixed Annual Percentage Rates for vehicle model years 2021-2025. Florida loans are subject to Documentary Stamp Tax. The tax amount is not included in the quoted APR.

Was this helpful?
Thank you for your feedback!