The traditional or customary way to approach seeking a consumer loan or business equipment finance is to select the goods, do the deal with the seller and then start the search for finance. This process is fine in many circumstances. But there is an alternative and one that is gaining popularity due to its advantages – pre-approved loans and finance.
Jade Finance offers pre-approved loans across our portfolio and the benefits this approach presents can be extremely valuable to buyers of cars, boats, motorbikes, caravans, trucks and the full range of business equipment that we finance.
We explain how pre-approved loans work, how to apply and the advantages that this approach offers over the traditional post-purchase approach.
How a Pre-approved Loan Works
The ‘pre’ in pre-approved loans refers to being approved for finance prior to the purchase of the goods. More specifically, before making a definite commitment to buy by placing an order or a holding deposit.
The application, approval and processing process is similar to that of loans that are applied for after a purchase commitment is made.
The same application form applies as do all the legal and regulatory requirements for consumer finance as set out by ASIC. As a Licensed Credit Provider, Jade Finance abides by the Responsible Lending Guidelines and Regulations. These cover the information which must be collected from the loan application and the information on credit which must be provided to the applicant from the lender.
A pre-approved loan application with Jade Finance is done on a no-obligation basis. So if you have a pre-approved loan and change your mind on proceeding with buying anything at this point, it is not a problem.
Pre-approved loans do have a timeframe attached which your Jade consultant will advise at the time. If the time expires between approval of the loan and acting on the loan, the terms, conditions and pricing will need to be reviewed.
At the time of applying for a pre-approved loan, applicants usually do not know exactly how much the goods will cost. For example, with cars, they may be well aware of the advertised price of a vehicle but not totally sure of the on road and other costs and what discount and trade-in they may receive which will reduce the purchase price.
Therefore, an estimate of the total loan amount is submitted in the loan application. When the purchase is made and the seller invoice provided to the Jade consultant for settlement with our lender, then the exact amount of the loan is finalised. Any alteration to the repayments are also made.
Advantages over Post-Purchase Loans
We identify many reasons and situations where pre-approved loans have an advantage over post-purchase or traditionally procured finance:-
- Capture low stock items. With your loan ‘in your back pocket’ you’re ready to sign up on the first visit to the showroom. With stocks of some goods in short supply at the moment due to global supply chain issues this can present a distinct advantage.
- Improved negotiating position. Most sellers love a ‘cash buyer’ that is ready to pay for the goods straight away rather than having to wait while they go through the loan application process. A pre-approved loan essentially places buyers in a similar position to a cash buyer. Ready to sign and potentially in a good position to negotiate on price.
- Essential when buying at auction. Many auction houses will expect payment on the fall of the hammer. A pre-approved loan provides you with the confidence to bid to your loan limits and settle quickly.
- Provide buying confidence. Going off to look at cars, boats etc without a definite idea that you can get the finance to buy can be worrying. A pre-approved loan gives buyers confidence in the knowledge that they do have the capability to pay for the goods. It also provides a useful gauge to what you can and can’t afford and hence avoid committing beyond your limits.
- Avoid knee-jerk reactions. Without a pre-approved loans, buyers may be tempted to sign up for more expensive dealer finance or ‘desperation’ high cost loans.
Interest Rates on Pre-approved Loans
The interest rate on a pre-approved loan would be the same as when an applicant applies after committing to the purchase. So our cheap interest rate loans apply. If wanting rough repayment estimates on loans, those seeking a pre-approved loan can use our loan calculators and interest rate calculators.
Jade Finance provides pre-approved loans and finances across our consumer and business product portfolio. The same features and benefits of each loan type apply.
- Personal Car Loans
- Business Vehicle Finance
- Secured Boat Loans
- Secured Caravan Finance
- Truck Loans
- Equipment Finance
- Marine Finance
- Secured Motorbike Loans
Be on the front foot when approaching a significant purchase by securing a pre-approved loan.
Contact Jade Finance by phone 1300 000 008 to discuss a pre-approved loan for your upcoming purchase.
DISCLAIMER: NO LIABILITY IS ACCEPTED IF ERRORS OR MISREPRESENTATIONS ARE FOUND IN THIS ARTICLE. THE ARTICLE IS PREPARED AND PRESENTED FOR GENERAL INFORMATIVE PURPOSES AND IS NOT INTENDED TO BE THE SOLE SOURCE OF INFORMATION FOR MAKING FINANCIAL DECISIONS. THOSE REQUIRING GUIDANCE AND ADVICE SHOULD CONSULT A FINANCIAL ADVISOR.