Personal Loan Prequalification: What You Need to Know

A prequalification can allow you to preview a lender’s personal loan estimated rates, borrowing amounts, and terms you might qualify for if you take out a loan. To prequalify, you’ll need to share basic personal and financial information with a lender—typically online.

Then, they’ll show you potential offers so you can decide whether to move forward and formally apply for a loan. Since a prequalification involves a soft credit inquiry rather than a hard one, you won’t have to worry about any impact to your credit score.

Keep in mind that while the prequalification process is fairly common, not all personal loan lenders offer it. In some cases, you may have to complete a full application and agree to a credit inquiry right off the bat.

FYI: BHG Financial lets you explore personal loan rate estimates and offers in seconds. There’s no impact on your credit to check your rate.¹

A prequalification shows you estimated loan offers, while a pre-approval is essentially a conditional loan offer. Some lenders may also send pre-approval offers by mail, email, or phone, often as marketing to existing customers or people they’ve identified as ideal borrowers. Those who have already been pre-approved for a loan may be able to get approved for a loan faster because a lender has already deemed you a suitable candidate based on your finances and creditworthiness. 

To get pre-approved, you’ll likely need to provide pay stubs, bank returns, and bank statements.

Although you don’t have to prequalify for a personal loan, doing so is a good idea. By pre-qualifying, you can:

• Simplify your search: Since there is no shortage of personal loan lenders out there, prequalifying can help you narrow down your options and find the best loan for your needs. You’ll be able to quickly identify which lenders are a good fit and which ones aren’t.
• Keep your credit score in good shape: A prequalification typically involves a soft credit inquiry, which won’t have any impact on your credit score, even if you decide to pre-qualify with several lenders. A formal loan application and pre-approval require a hard credit check, which may temporarily bring down your score by a few points. To avoid extra hits, stick to prequalifying with your top choice lender.
• Apply confidently: While a prequalification isn’t a guaranteed loan offer, it can still indicate your chances of approval. It will also make it easier to figure out whether a lender’s rate and terms align with your particular budget and needs.

If you’re interested in prequalifying for a personal loan, follow these steps.

1. Check your credit score

First, review your credit scores and credit report so you know which lenders are likely to approve you. In general, a score of 740 or higher will lead to the most competitive rates and terms. Strengthening your credit is one of the most effective ways to improve your prequalification odds, so it’s important to monitor your credit history regularly.

To check your credit, use a free online tool or ask your credit card company if they offer credit card monitoring. You can also pull free copies of your reports from the three major credit bureaus—Experian, Equifax, and TransUnion. Review each report carefully and dispute any errors or inaccuracies that may be dragging down your score.

2. Shop around

Rates and terms vary by lender, so it’s important to conduct thorough research. Consider factors such as the annual percentage rate (APR), loan amounts offered, repayment terms, and other services that suit your financial situation. If you have excellent credit or a higher income, for example, narrow down your list to lenders with stricter credit qualifications. This can help you land more attractive rates and terms.

3. Complete a prequalification form

Once you find a lender that seems to check off your boxes, you can prequalify. Be prepared to provide basic details about yourself, including your income, desired loan amount and term, credit score range, and reason for borrowing.

You may also need to include your employment status and monthly debt obligations. Ideally, you’ll prequalify with at least three lenders so you can weigh your loan options and move forward with the best one.

At BHG Financial, we make it easy to pre-qualify for a personal loan up to $250,000² with flexible terms of up to 10 years.^2,3

It only takes a few minutes to check your eligibility and unlock personalized loan offers. Plus, there’s no impact to your credit score or obligation to proceed with a loan¹. If you do decide to formally apply, you can expect an approval decision within 24 hours and funding in as few as five days.⁴

If you’re interested, a U.S.-based loan specialist can guide you through the pre-qualification process and answer any questions you might have.

Will pre-qualification affect my credit score?

No. In most cases, pre-qualifying for a personal loan won’t impact your credit score because lenders will use a soft credit inquiry rather than a hard credit inquiry. Before comparing offers, double check each lender’s pre-qualification process and the potential impact to your credit.

How long does a pre-qualified offer last?

Typically, pre-qualification offers last 30 to 90 days. This timeframe helps ensure your finances do not change significantly during the offer period.

Can I pre-qualify with multiple lenders?

Yes. In fact, it’s a good idea to pre-qualify with several lenders so you can compare potential loan offers and find the best loan for your needs—without taking a toll on your credit.

What information is needed to pre-qualify?

Most lenders will ask you for basic personal and financial information, such as your name, address, and Social Security number. You may also be asked for your estimated credit, income, monthly housing payment, and desired loan amount.