How Do I Get Pre-Approved?

Getting pre-approved makes it easier to secure a personal loan.

Timing is everything.

In a financial pinch, a personal loan can help make ends meet, giving borrowers the opportunity to access the funds they need and pay them off over time. Pre-approval or pre-qualification allows you to access funds easily, and applying to be pre-approved is unlikely to impact your credit score, so there’s almost no downside.

How do I get pre-approved for a personal loan?

Getting pre-approved begins with researching the type of loan you need. There are many types of lenders and many types of interest rates. The amount you can be approved for, and your interest rate, will depend heavily on your credit score. If your credit is less-than-stellar, you can still qualify, but you might have a higher interest rate.

When you have chosen a lending company—or companies—you fill out a pre-qualification form. Many companies use “pre-approval” and “pre-qualification” interchangeably, though they have the same concept: using your credit score and income to determine a reasonable amount of money that you can borrow.

As part of the process, there will be a soft credit check, where the lending company will ask to see your credit score. Note that it does not actually affect or change your score until you ask to borrow more money.

Many companies offer pre-approval for personal loans within minutes online. The company will return an offer that contains a loan amount and an interest rate. As a conscientious consumer, you will want to compare the rates and consider how much you can reasonably pay back and over what length of time. The ball is in your court; you can choose the right loan for you.

Next, you will formally apply for the loan. This process is more involved, including submitting your previous tax returns, proof of income, and other relevant financial documents. Applying for a new loan does impact your credit score—this is called a hard credit check—but luckily it usually only affects your score by about five points.

If you are not pre-approved, you will receive a notification called Adverse Action. The form often describes the reason that the loan was not pre-approved. In this case, consider a co-signer or co-borrower, or work on improving your credit score before applying again.

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

When applying for a personal loan, you can use pre-approval as a way to shop for loans, determine their different terms and interest rates, and decide which lender is right for you. Using pre-approval makes you a smarter consumer and gets you the money you need faster and more easily with no cost to you.


Joe Schwartz | Loans Editor