Personal Loan Prequalification: A Guide to Get Approved Without Affecting Your Credit Score

If you’re considering taking out a personal loan, it’s essential to understand the prequalification process. Prequalifying for a personal loan can help you determine if you’re eligible for a loan without affecting your credit score. This guide will provide an overview of everything you need to know about personal loan prequalification, including the different types of credit checks, the prequalification process, and what to do if you don’t qualify.

Soft Credit Checks vs. Hard Credit Checks

When you apply for a personal loan, the lender will typically perform one of two types of credit checks: a soft credit check or a hard credit check.

A soft credit check is a credit inquiry that doesn’t affect your credit score. The lender will review your credit report and score to determine if you meet their lending criteria, but the inquiry won’t be reported to the credit bureaus. Soft credit checks are often used during prequalification to provide you with loan offers without impacting your credit score.

On the other hand, a hard credit check is a formal credit inquiry that can impact your credit score. When a lender performs a hard credit check, it’s typically because you’ve submitted a formal loan application. Hard credit checks are reported to the credit bureaus and remain on your credit report for up to two years. Multiple hard inquiries in a short period can significantly impact your credit score.

Prequalification Process for Personal Loans

The prequalification process for personal loans can vary by lender, but most follow a similar process. Here are the six general steps for prequalifying for a personal loan:

  1. Fill out the prequalification form: You’ll typically provide your identifying information, such as your name, Social Security number, date of birth, employment, and income details, and the amount of money you want to borrow.
  2. Submit the form: Most lenders will allow you to check your loan offers without a hard credit pull. As long as this is noted on the prequalification form, you can click the “submit” button without fear of an adverse impact on your credit score.
  3. Review your loan offers: After submitting the form, you’ll either see your loan offers on the screen or receive notification that you don’t qualify for a loan with that lender.
  4. Select your loan offer: After comparing all of your interest rates, loan terms, and monthly payments, you can select the offer that best meets your needs.
  5. Apply for a personal loan: If you receive loan offers through prequalification, you can finalize an application and receive the loan. However, prequalification doesn’t guarantee final loan approval, and the lender may need to verify the information you provided, especially in regard to income.
  6. Get your money: Assuming your formal loan application proceeds without any major issues and the loan is approved, the money will then be deposited to your bank account.

What If You Don’t Qualify?

If you don’t qualify for a personal loan, there are still options available to you. For example, you could work on improving your credit score or consider lenders who specialize in loans to borrowers with imperfect credit histories. Alternatively, you could consider applying with a co-signer to boost your chances of approval.

It’s also worth noting that if you’re not approved for a loan, it may be because your credit score or history had a red flag, your income or employment history wasn’t sufficient, or your other debts were too high. If your other debts are consuming too much of your income, you could call the lender and explain your situation, specifically which of your monthly payment obligations will be eliminated if you obtain a personal loan.

Benefits of Prequalifying for a Personal Loan

Prequalifying for a personal loan has several benefits, including:

  1. No impact on your credit score: The prequalification process involves a soft credit check, which doesn’t impact your credit score. You can explore loan options and rates without worrying about hurting your credit score.
  2. Save time and energy: Prequalifying for a personal loan allows you to compare loan offers from multiple lenders quickly and easily. You can do this online without physically visiting multiple banks or lenders, which saves you time and energy.
  3. Know your loan options: Prequalifying for a personal loan helps you understand the loan options available to you. You can review different loan terms, interest rates, and monthly payments to determine which loan offer is best for you.
  4. Boost your chances of approval: Prequalifying for a personal loan can help you identify potential issues with your application, such as insufficient income or high debt-to-income ratio. You can address these issues before formally applying for a loan, which increases your chances of approval.

Tips for Prequalifying for a Personal Loan

Here are some tips to help you prequalify for a personal loan successfully:

  1. Check your credit score and report: Before prequalifying for a personal loan, it’s a good idea to check your credit score and report. This helps you understand your creditworthiness and identify any potential issues that could impact your loan application.
  2. Provide accurate information: When filling out the prequalification form, make sure you provide accurate information. Inaccurate information can lead to loan denial or approval for a lower loan amount or interest rate.
  3. Compare loan offers: Review loan offers from multiple lenders to ensure you’re getting the best terms, interest rates, and monthly payments for your needs.
  4. Understand the loan terms: Before selecting a loan offer, make sure you understand the loan terms, including the interest rate, repayment period, and any fees or penalties associated with the loan.
  5. Read the fine print: Review the loan agreement carefully before signing. Make sure you understand all the terms and conditions, including any fees or penalties for early repayment.


Prequalifying for a personal loan is a useful tool that can help you determine if you’re eligible for a loan without affecting your credit score. By understanding the prequalification process and following the tips outlined in this guide, you can prequalify for a personal loan successfully and select the loan offer that best meets your needs. Remember to always compare loan offers from multiple lenders and read the fine print carefully before signing any loan agreement.

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