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How Can You Prequalify for a Personal Loan?


Prequalifying for a personal loan allows a lender to evaluate your basic financial information to determine your chances of approval before you apply without hurting your credit. Lenders check credit using soft inquiries, which don’t affect credit scores, and provide prequalified borrowers preliminary offers that may include estimated loan amounts, interest rates and monthly payments.

As long as lenders run soft inquiries to prequalify borrowers, you can shop for the best deals with no effect on your credit. However, prequalification doesn’t guarantee you’ll be approved for a personal loan. You’ll still have to apply for the loan and provide information that could change the lender's decision or offer.

Here's more about how you can prequalify for a personal loan and what's involved in the process.

What are the steps to prequalify for a personal loan?

The process of prequalifying for a personal loan can vary by lender, but it often includes three steps and should always be free. Prospective borrowers provide lenders personal and financial information, lenders review the information and perform soft credit inquiries, and prequalified borrowers receive offers.

Lenders often require these details:

  • Contact information, such as address and phone number
  • Social Security number and birthdate
  • Income, debt and employment data
  • Desired loan amount and purpose

Next, the lender uses a soft inquiry to see whether you're a good candidate for a personal loan. You could prequalify with several lenders, checking whether they use soft inquiries, and then choose the best offer for your financial situation.

The exact requirements to prequalify for a personal loan will differ, but key factors include your credit score and debt-to-income ratio.

If you prequalify for a personal loan, the lender will provide you an offer that might include an estimated loan amount, annual percentage rate and repayment term. If you’ve finished comparison shopping and are happy with your offer, you can apply for the loan.

Just keep in mind your personal loan application will trigger a hard inquiry that could drop your credit score by up to five points, according to FICO. Credit inquiries remain on your credit report for two years, but most credit scores rebound within six months.

Can you get a personal loan with a credit score of 550?

A credit score of 550, which FICO considers poor, can mean limited and costly personal loan options. But with good credit – a FICO score of 670 or higher – borrowers get better interest rates and terms.

If you hope to prequalify for a personal loan with bad credit, you might want to start your search with credit unions rather than banks.

"Every credit union is different, but generally speaking, credit unions will give you more of a look compared to banks that tend to be more automatic with their credit scoring," says Jordan van Rijn, senior economist, Credit Union National Association, a trade group for credit unions.

Bridget Staffileno, vice president of community affairs at Jolt Credit Union in Saginaw, Michigan, calls this "second look" storytelling lending.

"When we look at someone who has dings in their credit, we ask them what’s going on," Staffileno says. "Maybe there was a death or divorce, or there are medical bills. If we see  they've been trying to make payments, we’re willing to work with them."

What if you don't prequalify for a personal loan?

If you don't prequalify for a personal loan, start working on your credit now to improve your chances of prequalifying for a personal loan in the future. Review your credit reports and scores, and dispute errors with the credit bureaus.

You can also increase your odds of success by narrowing your search to lenders that work with borrowers who have credit profiles similar to your own. Some lenders may specialize in excellent or good credit and others in fair or bad credit, although those lenders could charge high APRs.
Exploring other financing options is another possibility. If you wanted a personal loan to make home improvements, you could look at a home equity loan or line of credit. You could see if a family member or friend would co-sign a loan or lend you money. Alternatively, you could also try your luck with a different lender that may be more willing to work with qualification gaps.

You might be surprised by how lenders could accommodate you. Staffileno says her credit union will overlook work history, for example, given high unemployment rates during the pandemic.

"COVID-19 has changed the way we’re looking at people who come in for loans who haven't had a job for a certain period of time," she says.


Our Personal Loans are just that – personal. Use the money for overdraft protection, to cover school expenses or just have it available for peace of mind. It'll be there for whatever you need.