How to obtain a personal loan pre-qualification

Save time by qualifying before you apply

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A personal loan can be a helpful way to cover large or unexpected expenses. This type of financing is usually quick to get and less expensive than other funding options, such as credit cards. Most lenders allow you to pre-qualify for a personal loan without it impacting your credit score.

When you pre-qualify for a personal loan, you’ll see the rates and terms you might receive. This information helps with budgeting and planning and can speed up the application process, since you’ll already have provided some information. Plus, pre-qualifying with several lenders allows you to compare offers to find the best personal loan.

By taking a few simple steps to pre-qualify for a personal loan, you’ll save time in the long run and be better equipped to find the right loan for you.

Key insights

  • Pre-qualification is a basic review of your creditworthiness to show you generally meet the lender’s loan requirements.
  • Pre-qualification typically doesn’t impact your credit score.
  • Once you pre-qualify for a personal loan, the lender will provide the estimated rates and terms you can get.

What does it mean to pre-qualify for a personal loan?

When you apply for pre-qualification for a personal loan, the lender requests your income and performs a basic credit check to see if you qualify without going over documentation. Lenders often use a soft credit check with no credit score impact, and you don’t have to provide proof of income, like pay stubs.

Lenders mostly rely on the information you self-report to pre-qualify you for a personal loan. Therefore, it’s essential to provide accurate information. The more accurate you are, the more accurate the offers you receive will be.

How is pre-qualification different from preapproval?

A pre-qualification generally means you meet a lender’s basic loan requirements based on a quick review of your credit and self-reported income. A preapproval usually means your lender has preliminarily approved you for a loan. Preapproval involves a more in-depth review of your creditworthiness, including a hard credit check, and income verification using documents you submit (e.g., pay stubs, bank statements, tax returns).

For preapproval, your lender does a hard credit check to evaluate your credit score and history, reviews your proof of income and calculates your debt-to-income (DTI) ratio. Once you get preapproval, you are closer to obtaining a loan. The next steps are to select the terms you want and provide further documentation (if necessary) to obtain final approval. The lender will then provide a loan agreement for you to review and sign before you get access to funding.

» MORE: 9 ways to improve your credit score

Why should I get pre-qualified for a personal loan?

The main reasons you should get pre-qualified for a personal loan are:

  • To find out if you qualify without any effect on your credit score: Most lenders use a soft credit check to evaluate your credit score and history in the pre-qualification stage. This means you can find out if you potentially qualify for a loan without it affecting your credit.
  • To improve your credit to get a better offer: If you don’t qualify for the loan or the terms you want, you can use the information you learned to improve your chances. Once you’ve made the adjustments (e.g., paying down debts, establishing a better payment history), you can apply again to receive a better offer.
  • To give yourself time to evaluate your budget: After pre-qualifying, you can review your budget and see if you can handle the payments the lender offers. For example, you might decide to set the payment amount aside in a bank account for a couple of months to ensure you can comfortably afford it.
  • To evaluate several personal loan options: Since the pre-qualification stage usually relies on a soft credit check, you can submit your information to multiple lenders with no credit score impact. You can then evaluate the offers you receive to choose the best one.

The pre-qualification process usually only takes a few minutes. By setting aside a little bit of time to evaluate your options, you’ll be better prepared to choose the best personal loan for your situation.

» MORE: Low-income loans: personal loans for a tight budget

How can I pre-qualify for a personal loan?

The first step to getting pre-qualified for a personal loan is to search for personal loan companies. Once you’ve identified a reputable lender, apply online and provide the lender with some basic personal information and details about your income and credit. The lender will use this information to evaluate if you meet its basic loan requirements.

Information the lender may request includes:

  • Full legal name
  • Home and mailing address
  • Date of birth
  • Social Security number
  • Employer name and start date
  • Estimated credit score
  • Gross monthly income
  • Details about your current outstanding debt
  • Desired loan amount and repayment term
  • Reason you need the funds

When you’ve submitted the required information, most lenders do a soft credit check, which has no impact on your credit score. You should confirm the type of credit check lenders will perform before proceeding.

Levon L. Galstyan, a certified public accountant with Oak View Law Group in Auburn, California, said: “Find out whether lenders pull your credit report hard or soft when providing you a quote while you shop around for a new loan. Get estimates from lenders who show you your rates using only a soft pull because a hard credit pull will lower your score, at least temporarily.”

What happens after I pre-qualify for a personal loan?

After you pre-qualify for a personal loan, the lender provides details about offers, including the loan amount, rate and term you might receive. Carefully review the offers, and check if there are any associated fees. Compare your offer with other pre-qualification offers you’ve received, and choose the one that’s best for you.

Once you’ve decided on a personal loan, you’ll accept the offer and provide the lender with any other required documentation, such as proof of income (e.g., pay stubs, tax returns). After final approval, you’ll sign the loan documents and get access to your loan funds.

Need cash now? Use our Personal Loans Tool to lock in great offers in minutes!


    Does pre-qualified mean approved?

    Pre-qualifying means a preliminary review of your self-reported information shows you meet the lender’s basic loan requirements. By contrast, to get approved for a loan, your lender must thoroughly review your creditworthiness, which usually includes doing a hard credit check and verifying proof of income.

    How long is a pre-qualification good for?

    Most pre-qualifications are only good for 30 to 90 days. The offer from the lender will specify how long the pre-qualification lasts. Even if the pre-qualification is still valid, you should confirm if you still pre-qualify if there are changes to your credit or income.

    Will I know what rate I’m getting if I pre-qualify?

    Your lender will give you a general idea of the rate you can get when you pre-qualify for a loan. It won’t finalize the actual rate and overall terms you’ll receive until you are formally approved for the loan.

    Bottom line

    Getting pre-qualified for a personal loan is usually quick and straightforward. To get started, you provide the lender with basic information about yourself, like how much money you want to borrow, your income and your estimated credit score. The lender reviews this information and does a soft credit check to see if you pre-qualify. This does not impact your credit score.

    If you pre-qualify for the loan, the lender will share the rates and terms you might receive. Compare these with other lenders’ offers to find the best option for you. After you select the personal loan you want, you will formally apply online, provide your lender with any required documents, select the loan options you want, get approved and receive the funds you need.

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