At a Glance

Personal loans can be excellent financial tools to make large purchases, cover unexpected expenses, pay for home improvements, refinance debt, and more. Interest rates for personal loans tend to be lower than credit card interest rates. Personal loans come with fixed monthly payments, so payback is simpler than on a credit card.

But blindly applying for personal loans isn’t your best option. Instead, you should seek out pre-qualified personal loan offers.

In this article, you’ll learn:

What is personal loan pre-qualification?

When a lender pre-qualifies you for a personal loan, they offer you a tentative estimate of the loan amount and terms they’re willing to give you. It’s a fast method of determining your chances for loan approval.

Pre-qualification is not a guarantee, but your odds of being approved after getting pre-qualified are usually very good.

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

Getting pre-qualified makes shopping for loans easier because it narrows down your choices to your strongest approval prospects. Pre-qualification also increases your chances of getting the best deal on your personal loan. This can help you save money on interest and fees, and you can work out how the loan will fit into your budget ahead of time.

Pre-qualification can minimize damage to your credit score, too.

When you formally apply for a loan, a lender performs a hard credit check—called a hard inquiry—to make a lending decision. Hard inquiries may lower your credit slightly. Each inquiry stays on your report for two years.

Excessive hard inquiries in a short timespan can make lenders suspicious, and they may be more likely to reject your application.

On the other hand, pre-qualifications trigger soft inquiries, which don’t affect your credit. These occur often—if you receive a pre-qualified credit card or personal loan offer in the mail, the lender has run a soft inquiry on your report.

Now, you still have to apply for the loan and subject yourself to a hard credit check after pre-qualification. Nevertheless, since pre-qualification gives you an idea of your approval chances for each option, you can pick only your best prospects and reduce the number of hard inquiries on your report.

How do you pre-qualify for a personal loan?

Pre-qualification is a fast and easy process. It should never cost money, so if a lender asks for a fee, look elsewhere for a loan.

If you have a high credit score, you’ll receive pre-qualified offers in the mail reasonably often. These offers contain a unique code and instructions on applying for your pre-qualified offer.

Your other option is to use a loan aggregation website, like Credello.

With Credello, you enter basic information about yourself—including income, employment, and homeowner status. After sharing your financial goals with us, you’ll get a personalized list of solutions, ranked by how well they match your needs.


Lenders that offer prequalifications typically let you know your status immediately. You may be asked to submit additional information to confirm you qualify as part of the application process, which can add one or two days to the process.

No, prequalification triggers a soft credit inquiry, which does not affect your credit score. There is no risk to your credit by getting prequalified.

No. Even if you prequalify for a loan, it doesn’t mean you’ll be approved. That’s because prequalification is based only on what the person reports, while actual approval examines information in greater detail, including employment status, income, debt, credit reports, and other factors.

Yes, if there are any discrepancies between what you report and what the lender finds, or they come across information they don’t like, a lender can deny your loan even if prequalification was previously granted.