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What is a blank-check auto loan? Should I use the full amount?
"I was recently approved for a blank-check auto loan by my bank. I'm not 100% certain what this means, though I think it means I'm approved for up to a certain amount they stipulate. Should I use the full amount?"
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“As you determined, a blank-check auto loan is a pre-approval for a certain amount. This means you can spend every penny up to that amount, but no more than that.
As for how much you should spend, you can certainly spend the whole amount. The idea is that you don’t want the dealership to know how much the blank check is for.
If they find out, be prepared to be upsold for every option, accessory, and extended warranty they have.
Keep tight-lipped, and if you don’t have to spend the entire amount, don’t. You’ll end up saving money on interest in the long run.”
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- Gregory R.
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