How to Pre-Qualify for a Loan

Pre-qualifying for personal loans is a quick and easy way to shop for the best rates

Couple trying to pre-qualify for a loan

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Whether you’re ready to embrace the ornate wallpaper trend or just want to consolidate credit card debt, a personal loan can be a useful financing option. But rates, terms, and eligibility requirements can vary between lenders, making it difficult to find the best deal. 

Pre-qualifying for a loan can allow you to view potential rates and give you an idea of how much you can borrow. By learning how to pre-qualify for a loan, you can get personalized quotes and find the right offer. 

Hard credit inquiries occur when you submit a full loan application, and these can have a small negative effect on your credit. But pre-qualifying only requires a soft credit inquiry, which has no impact on your credit; this lets you shop around without worrying about hurting your credit.

What You Need to Get Pre-Qualified for a Loan

Personal loan pre-qualifications are typically very simple; You can fill out an online form and view your options within minutes. To get pre-qualified for a loan, a lender will typically ask for the following information: 

  • Desired loan amount: Enter the amount of money you want to borrow, such as $10,000 or $25,000. 
  • Personal information: The lender will need your name, address, and contact information. 
  • Social Security number: Most lenders require a valid Social Security number to view your loan options. 
  • Employment: The form may prompt you to enter your employment information, including your income, employer’s name, and employer’s contact information. 
  • Loan purpose: Rates and terms may depend on the loan’s use, so the lender may ask you to enter the intended purpose for the loan. Common options include debt consolidation, medical expenses, and home renovations.

How to Pre-Qualify for a Loan

Follow these steps to pre-qualify for a loan; the same basic instructions will work for most loan types, including personal loans, auto loans, student loans, and business loans.

1. Research Multiple Lenders

Many lenders offer personal loans for multiple purposes. Loan terms and annual percentage rates (APRs) can vary, so it’s wise to shop around with several lenders.

Looking for a personal loan for a specific purpose? See:

2. Fill Out the Pre-Qualification Form

Once you’ve narrowed down your list of lenders, you can request pre-qualifications from each one. You can fill out the pre-qualification forms online and view potential loan options, and you’ll be asked to provide the following: 

  • Your personal information
  • Your Social Security number
  • Details about your income and employment
  • Your requested loan amount and its intended use

3. Submit Your Pre-Qualification Application

After filling out the form, the lender will usually ask for your consent to its terms of use or electronic pre-qualification agreement. Be sure to look for a statement that the lender will perform a soft credit inquiry, which will not affect your credit. 

If you agree to its terms, check the corresponding box and submit your loan pre-qualification application. The lender will process the pre-qualification within minutes, and you can view available loan options. 

Not all lenders offer pre-qualification; some require a full application, with a corresponding hard credit inquiry. If you’re shopping around, submit any full loan applications within a limited window. FICO scoring models will consider all of the hard inquiries within a short period (such as 14 or 30 days, depending on the model) as just one hard credit inquiry, reducing the impact to your credit.

Best Loans With Pre-Qualification

 Lender  APR Range*  Loan Amounts  Loan Term
SoFi 8.99%–25.81%  $5,000–$100,000 24–84 months
PenFed  7.74%–17.99%  $600–$50,000  12–60 months 
Upgrade  8.49%–35.99%  $1,000–$50,000  24–84 months 
U.S. Bank  8.74%–21.24%  $1,000–$50,000 12–24 months 
Discover 6.99%–24.99% $2,500–$35,000 36–84 months

*APRs are accurate as of publication.

See a broader selection of our top loan providers and the reasons we picked them here: The Best Personal Loans.

Benefits of Loan Pre-Qualification

There are several benefits to pre-qualifying for a personal loan: 

  • You’ll get a better idea of how much you can borrow: Although you may have a dollar amount in mind, you may qualify for less than you expected based on your credit or income. A loan pre-qualification will give you a ballpark figure of what you can borrow. 
  • You can see available loan terms and monthly payments: When you pre-qualify for a loan, the lender will list the available loan terms for your desired loan amount and credit. By viewing the actual options you could qualify for, you can find out how much your monthly payments would be. 
  • You can compare realistic rates: On their websites, lenders list a wide range of rates. The lowest possible rates are limited to borrowers with excellent credit who typically choose short repayment terms. With a loan pre-qualification, you can get a better idea of the rates you’ll end up paying. 

Use a personal loan calculator to determine how much your payments will be with different terms and rates.

How to Increase Your Odds of Approval

Before applying for a personal loan, you may increase your odds of qualifying—and securing a better rate—by following these tips: 

  • Add a co-signer or joint applicant: Some personal loan companies allow you to add a co-signer or joint applicant to your loan application. Adding a creditworthy co-signer or co-applicant improves your chances of qualifying for a loan. 
  • Pay down existing debt: Paying down the balances on your existing debt, particularly your credit cards, will reduce your credit utilization and potentially raise your credit score. 
  • Limit new inquiries: Hard credit inquiries can cause your score to drop by several points, so only apply for new credit when you really need it. 
  • Make payments on time: A history of making payments on time is the biggest factor affecting your credit. Make all of your payments on time to establish good credit. 

Applying for a Loan

After submitting your pre-qualification request, the lender will show you available loan options. If you find a loan that works for you, you can proceed with the loan application. 

Pre-qualification offers typically have limited lifespans; they expire within 14 to 30 days, so plan to act quickly if you want to move forward. Otherwise, the offered interest rate may change.

When you complete an application for a personal loan, the lender will ask for additional information, such as a copy of your driver’s license, proof of income, and your bank routing and account numbers. The lender will also usually ask for your consent for a hard credit check. The review process can take longer than the pre-qualification did, but you can usually expect a decision—either approved or denied, or a request for more information—within a few hours.

What Is Pre-Qualification for a Personal Loan?

When you pre-qualify for a personal loan, you submit a request to a lender asking it to make a preliminary decision about your creditworthiness. You can find out your likelihood of qualifying for a loan and determine how much the lender will allow you to borrow. Lenders may also allow you to view potential loan options, including the rates and term lengths available for the desired loan amount and your credit. 

Personal loan pre-qualifications use soft credit inquiries rather than hard credit checks, so there is no impact on your credit score. Because pre-qualifications only use soft credit checks, you can shop around and request several quotes without affecting your credit.

A personal loan pre-qualification isn't a guarantee that the lender will approve your application or that you'll qualify for the listed terms. Instead, the pre-qualification is more of a rough estimate. When you complete the full application and submit documentation, you may qualify for different terms (or you may not qualify for a loan at all!).

Does Pre-Qualification Hurt My Credit Score?

Loan pre-qualifications do not hurt your credit score. They use soft credit inquiries, which have no effect on your credit. 

What Disqualifies You From Getting a Personal Loan?

Not everyone is eligible for a personal loan. During the pre-qualification process or after undergoing a hard credit inquiry, you may find out that you don't qualify. Common reasons for loan denials include: 

  • You have bad credit: If you have poor to fair credit, meaning a score of 669 or below, lenders may not work with you. See the best bad credit loans for some lenders that may fit.
  • You don’t meet the lender’s income requirements: Most lenders have a minimum income requirement that borrowers must meet to qualify for a loan. If you don’t make enough money, you won’t qualify for a loan unless you add a co-signer to the application. 
  • High debt-to-income ratio: Even if you earn a high salary, you may get denied if you have too much debt. Lenders will typically look at your debt-to-income ratio to determine whether you can afford the loan payments. 

Can You Pre-Qualify for a Loan With No Hard Credit Check?

Yes, you can pre-qualify for a personal loan without undergoing a hard credit check. Most lenders use soft credit inquiries, which don’t affect your credit score.

Does Pre-Qualification Guarantee a Loan?

Loan pre-qualifications are not guarantees; when you submit a full application you may not qualify for the loan terms, and you may be denied. Pre-qualifications only give you an idea of your eligibility and loan options. 

Article Sources
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  2. Consumer Financial Protection Bureau. "Comment for 1003.2 - Definitions."

  3. Experian. "What Happens If Your Loan Is Denied?"