How to Prequalify for a Personal Loan

Securing a personal loan can help if an unexpected cost arises, you want to consolidate high-interest debt, or you’re planning a home improvement project. Many banks and credit unions offer these types of loans, and most are unsecured, meaning they don’t require collateral like a car loan or mortgage would. 

Because individual lenders set their own loan rates and amounts, it’s helpful to shop around for a personal loan to find the best option for your needs. 

Prequalifying for a personal loan is an essential step in the loan comparison process. Here’s what personal loan prequalification is, which lenders allow it, how to prequalify, and the benefits of doing so. 

What is personal loan prequalification?

Many lenders give you the option to prequalify for personal loans and other types of loans, such as car loans or mortgages. Loan prequalification involves providing basic personal and financial information to a potential lender via an online form. 

After you input the requested information, the lender conducts a soft credit check, which doesn’t affect your credit score. You can then view your estimated loan amount and rate. 

The prequalification process can take a few minutes. It’s a helpful way to compare loan options. Rates, loan amounts, and terms vary across lenders, so taking the time to prequalify can help you find the best personal loan for your situation. 

---

Tip

Prequalifying for a personal loan doesn’t guarantee you’ll be approved for a quoted amount or rate. The loan amount and rate you’ll receive are estimates. The rate and amount you prequalify for could differ from what you’re approved for, but taking this step before you apply can offer valuable insight into estimated rates and amounts. 

---

Which lenders allow you to prequalify for a personal loan? 

You can generally prequalify for a personal loan online with an individual lender. Many let you check your rate and loan amounts with no impact on your credit score. 

In addition to prequalifying with an individual lender, you can also opt to prequalify for a loan through a lending marketplace, such as Credible or Lending Tree. These platforms let you compare personal loans from multiple lenders in one place, which is a convenient timesaver. 

Marketplace	LendEDU rating (out of 5)	Rates (APR)
Credible	5.0	7.49% – 35.99%
LendingTree	4.8	5.99% – 35.99%

With Credible, you can view the terms and conditions of potential loans without leaving the website. And LendingTree provides educational guidance every step of the way while also offering clear insight into potential loans. 

To get started, you’ll input basic personal information as you would when prequalifying with an individual lender. The marketplaces will then provide loan offers tailored to your individual needs. Here’s an in-depth look at how each platform works:

Credible – Best marketplace

View Rates

LendEDU rating: 5.0 out of 5

• Offers a wide selection of lenders
• Streamlines the application process
• Ensures transparency in terms and conditions

Credible provides a comprehensive platform for access to a wide spectrum of lenders. It stands out for its user-friendly interface, which streamlines the prequalification process for personal loans. 

Potential borrowers can compare offers from multiple lenders, allowing you to view terms and rates without the hassle of visiting numerous sites or filling out multiple forms.

Credible emphasizes transparency, enabling users to review the terms and conditions of their potential loans upfront. This approach helps borrowers understand what they’re getting into, ensuring no surprises occur. By offering clarity from the outset, Credible aids in making well-informed financial decisions.

LendingTree

View Rates

LendEDU rating: 4.8 out of 5

• Provides comprehensive comparison tools
• Delivers customized loan offers
• Features borrower-centric benefits

LendingTree distinguishes itself in the personal loan sector with its extensive comparison tools and resources. The platform excels in presenting tailored loan offers based on the borrower’s specific financial situation and credit profile, all while preserving the individual’s credit score during the prequalification phase.

The essence of LendingTree’s service is its focus on the borrower’s needs, offering flexible payment options and a wealth of educational materials. These resources are valuable ways to ensure you understand the nuances of personal loans. LendingTree helps ensure its borrowers are equipped with the knowledge needed to make decisions that align with their financial goals and capabilities. 

LendingTree’s commitment to education and customization enhances the prequalification experience, guiding users toward choices that best suit their circumstances.

List of lenders that allow prequalification

The following individual lenders also allow borrowers to prequalify with a soft credit check.

Lender	Rates (APR)
Avant	9.95% – 35.99%
Best Egg	8.99% – 35.99%
Discover	7.99% –​ 24.99%
LendingClub	8.98% – 35.99%
LendingPoint	7.99% – 35.99%
SoFi	8.99% – 29.99%

What are the benefits of personal loan preapproval?

If you’re considering a personal loan to help cover an upcoming cost, taking a few minutes to prequalify is worthwhile. Personal loan prequalification or preapproval can be beneficial for the following reasons: 

• No hard credit check: You won’t undergo a hard credit check when you prequalify, so you won’t need to worry about it hurting your chances of loan approval in the future. 
• Process is quick: Personal loan prequalification often takes just a few minutes. You’ll receive potential loan offers right away. 
• Offers insight into the likelihood of approval: Taking this step could provide insight into whether you’ll be approved, which can be helpful if your credit isn’t stellar. 
• Lets you see potential rates: You’ll get insight into potential rates from different lenders, which is helpful because rates vary depending on your chosen lender. 
• Lets you see potential loan amounts: If you’re seeking a certain loan amount to cover a known cost, prequalifying may help you understand whether you’re likely to qualify for a loan of that size. 
• Useful comparison tool: The insight you gain from the prequalification process can help you narrow down your loan options. 

Once you’ve finished comparison shopping, you can apply for a personal loan or multiple loans. Applying for multiple loans can be beneficial because it lets you see your exact amount, rate, and terms. A formal loan application will result in a hard inquiry, but multiple applications may not harm your credit as much as you’d think. 

How to prequalify for a personal loan

Prequalifying through a marketplace versus an individual lender may look different. However, you can generally prequalify for a personal loan online through a platform like Credible or LendingTree, or a lender website. Certain lenders may also let you prequalify over the phone. 

The information lenders request during the process can vary but may include: 

• Loan purpose
• Loan amount you’re seeking
• Your name
• Estimated credit score
• Social Security number
• Address
• Employment status
• Annual income
• Email address

Your lender will then provide a list of potential loan offers, often within seconds or a few minutes. If you’re far along in the comparison process, you can choose an offer from the list, or you can make a note of potential offers and keep shopping around for a personal loan. 

If you move forward with a formal application, it will lead to a hard credit check; a hard credit check will lower your credit score by a few points. But as long as you make on-time monthly payments, it shouldn’t take long to recover. You will also need to provide supporting documentation to verify your income, identity, and address. Documentation may include:

• Social Security number 
• Bank statements
• W-2s
• Pay stubs
• Past tax returns
• Investment account statements
• A copy of your driver’s license or another government-issued ID
• Copies of recent utility bills or mortgage statements

Popular credit scoring models allow for a “rate shopping” window in which multiple loan applications only count as a single inquiry. This window ranges from 14 to 45 days, depending on the scoring model your lender uses in its loan decisions. So if you choose to apply for multiple personal loans, it’s wise to do so within a two-week time frame.