5 reasons to get your clients pre-approved for a loan
Looking for ways to encourage your clients to get pre-approved for a loan before they make their next vehicle, equipment, or machinery purchase? Planning in advance for major purchases can have significant benefits for buyers.
Here are 5 reasons why pre-approval is a great idea for your clients.
1. Allows your clients to set a budget
A pre-approval provides your client with a maximum loan amount they can borrow for a new purchase. This allows them to set their budget in advance and know what they can spend on their new vehicle or equipment. It helps them find options that are suitable for their needs and their financial situation.
2. Identifies any credit problems early
Identifying potential credit problems at the start can save your client time, stress and frustration in the long run. By doing this early in the purchase journey, you can also help your client create a plan to fix any credit problems. This helps to strengthen their financial position before applying again.
3. Gives your client confidence
Your client will feel greater confidence knowing they can afford the vehicle or equipment they’re considering. They’ll present as a serious buyer and will be less likely to be persuaded to consider unsuitable options.
4. More power to negotiate
In addition to the confidence boost, a pre-approval gives your client more power to negotiate their purchase. It’s a great way to show that the buyer will proceed if the price is right. A salesman is always keen to hit their sales target and knows that buyers can shop around too. This provides added incentive for them to give your client a better price to secure the deal. Your client may also be able to negotiate free extras or upgrades on their purchase.
5. Avoiding dealership finance
If your client has gone through the pre-approval process, they’re less likely to choose dealer finance at the time of purchase. This is a big win for you. Dealership finance is often more expensive than finance options you can provide, which means the client saves on their repayments too.
Discussing these benefits with your clients will add value and show you’re considering their best interests when it comes to financing their next vehicle or equipment purchase.