Pre-qualifying for a personal loan is an important part of the loan approval process, given that it can give you an insight into what interest rate you can expect to be charged and approximately how much you will be able to borrow. Even if you don’t pre-qualify, doing this step can help you understand how to improve your chances of getting a personal loan. Keep in mind that pre-qualifying for a loan does not guarantee that your loan will be approved.
Here Are Steps that You Need to Take to Pre-Qualify for A Personal Loan:
Select the lender you wish to apply to: You can get a personal loan from a bank, credit union, or an online lender. So, make sure to select one or more lenders to submit your pre-qualification application.
Submit the application: Next, you’ll want to submit the pre-qualification form, which will include details about your current occupation, income, existing debt, the amount you wish to borrow, and your contact details.
Lender reviews your information: Once the lender receives your application, a soft credit check will be done to assess your credit history and score. This helps the lender assess how risky it may be to approve your personal loan. Based on this assessment, the lender will either pre-qualify you for a loan or decline your application. If you are accepted, you may need to submit a formal personal loan application along with the required details and documents.
Things to Keep in Mind
– When you submit a pre-qualification form, the lender does a soft credit check. This does not impact your credit score.
– Since soft credit checks do not affect your credit score, you can get pre-qualified by multiple lenders. Doing this will help you weigh out your options better and pick one that has the best terms.
– To increase your chances of getting approved, consider taking some time to improve your credit score.
What Should You Do Once You Get Pre-Qualified?
As mentioned earlier, getting pre-qualified for a loan doesn’t mean your application will be approved. Once you are notified about being pre-qualified, you should gather the required documents and submit them to the lender along with your personal loan application. The lender will then verify your financial information and credit history by performing a hard credit check, after which your application will either be accepted or rejected.
