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How to Prequalify for a Personal Loan Without Hurting Your Credit

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The option to prequalify for a personal loan can be a huge help when you’re looking to borrow, as it lets you compare offers from multiple lenders with no commitment or negative impact on your credit score.

When you apply for a loan prequalification, a lender analyzes your basic financial information to determine your eligibility without affecting your credit. A lender can often estimate your APR, loan amount and monthly payment, all without a hard credit check.

Keep reading to learn more about how to get prequalified for a personal loan so you can find affordable rates and terms.

What does it mean to prequalify for a personal loan?

Many lenders let you check your potential loan terms, such as estimated APR and loan amount, without affecting your credit score. This is sometimes referred to as prequalifying for a loan. Personal loan prequalification only requires a soft credit inquiry and allows you to check loan eligibility before applying.

Prequalifying for a personal loan doesn’t guarantee that you’ll be approved when you put in a formal application. During the formal application process, the lender will conduct a hard credit inquiry, which may reveal financial information that could change your eligibility or the terms you qualify for.

LendingTree’s personal loan marketplace lets you compare offers from up to five personal loan lenders without affecting your credit score.

What you need to prequalify for a personal loan

What you need to provide for personal loan prequalification will depend on the lender, but you should prepare any paperwork with personal information about your debt, income and assets.

Lenders will likely want to know your:

  • Desired loan amount and loan purpose
  • Monthly net income and asset information
  • Contact information, including your home address and phone number
  • Identifying information, such as your date of birth and last four digits of your Social Security number

7 lenders that let you prequalify with a soft credit check

Not all lenders let you prequalify for a personal loan, but many will. Here’s a sample list of lenders that let you check your estimated personal loan terms, such as APR and loan amount, without affecting your credit score:

Lenders that let you check your possible loan terms without affecting your credit score
Lender Loan amount Loan length APR
Avant $2,000 to $35,000 12 to 60 months 9.95% to 35.95%
Discover $2,500 to $35,000 36 to 84 months 6.99% to 24.99%
LendingPoint $2,000 to $36,500 24 to 72 months 7.99% to 35.99%
OneMain Financial $1,500 to $20,000 24 to 60 months 18.00% to 35.99%
Happy Money (formerly Payoff) $5,000 to $40,000 24 to 60 months 7.99% to 29.99%
SoFi $5,000 to $100,000 24 to 84 months 7.99% to 23.43%
Upgrade $1,000 to $50,000 24 to 84 months 8.49% to 35.97%

Why it’s important to prequalify for a personal loan

Prequalifying for a personal loan lets you compare potential APRs across multiple lenders without affecting your credit score. This can help you find the personal loan lender that can offer you the lowest possible APR for your situation — which can save you money over the life of the loan.

The table below compares two $20,000 loans, one with a 10.50% APR and the other with a 15.50%. Check it out to see how much the lower APR can save you.

Cost savings between two personal loans with different APRs
Loan amount $20,000 $20,000
Loan length 5 years 5 years
Estimated APR* 10.50% 15.50%
Monthly payment $429.88 $481.06
Amount paid in interest $5,792.68 $8,863.83
Total cost of loan $25,792.68 $28,863.83
*APRs used are for demonstrative purposes only
Tip: Use this personal loan payment calculator to estimate how much you can save by shopping around for a personal loan with a lower APR.

3 tips for prequalifying for a personal loan

  1. Check your credit score, and work to improve it if necessary
  2. Calculate your debt-to-income ratio
  3. Research lenders for your credit band

1. Check your credit score, and work to improve it if necessary

Personal loans are typically unsecured, meaning they don’t require collateral. This means that personal loan lenders rely heavily on your financial history to determine your eligibility as a borrower. Your credit score is a reliable indicator for lenders, since it factors in your payment history, credit utilization ratio, credit inquiries and other financial information.

It can be hard to qualify for a personal loan if you have a bad credit score. To increase your chances of prequalifying for a personal loan, consider working to improve your credit score before you apply.

Follow these tips to improve your credit score:

Pay your bills on time. Your payment history accounts for 35% of your credit score, and late payments can stay on your credit report for up to seven years.

Reduce your credit utilization by paying down debt. Your credit utilization is the amount of credit you’ve used divided by the amount of credit you have available.

Review your credit report. You can request a free copy of your credit report from all three credit bureaus at Check our guide on disputing errors on your credit report.

If your credit is very low or you’re starting from scratch, consider opening a secured credit card. Secured credit cards require collateral in the form of a monetary deposit, making them an option for borrowers with low or no credit. Your deposit acts as your credit line. Using it and paying it off every month could build your credit.

2. Calculate your debt-to-income ratio

Another factor that personal loan lenders consider when issuing loans is a candidate’s debt-to-income (DTI) ratio. That’s because your DTI ratio gauges your ability to afford new debt. Personal loan lenders like to see a debt-to-income ratio of 35% or less.

Here’s how to calculate your DTI ratio:

Monthly debt payments ÷ Monthly gross income = DTI ratio

If your debt-to-income ratio is 36% or higher, consider paying down some of your debt before applying for a personal loan, or seeking an opportunity to increase your income.

3. Research lenders for your credit band

Not every lender will be a good fit for you, so search around for lenders that work with borrowers who have similar credit profiles to your own. Some lenders lend to borrowers with borrowers with fair or bad credit, but keep in mind that your loan terms may not be so favorable.

With a high APR, it would be more costly to borrow a personal loan. Bad credit borrowers could also consider borrowing from a credit union, which may offer better terms than a traditional bank.

Other lenders specialize in borrowers with good or excellent credit. By shopping around for a loan offer with the lowest possible APR for each unique financial situation, good credit borrowers may be able to save money on interest over the life of a loan.

What should you do after you’re prequalified?

While prequalification is an excellent tool for comparison shopping, it doesn’t guarantee that you’ll be approved for the loan. You’ll still need to submit a full application, upload supporting documentation and consent to a hard credit inquiry.

Once you’ve got your offers, compare details like interest rate, APR, fees and repayment term to determine which one is best for you. If and when you find a prequalification offer you like, you can move forward by submitting an application directly with the lender.

Every lender has its own process, but you’ll likely need to provide personal information, proof of income and other details. The lender will verify your information and, assuming everything goes smoothly, it will approve the loan.

Once the loan is approved, the lender will likely disburse the funds to your bank account. If you’re consolidating debt, the funds will be sent directly to your creditors to pay off your debts.

What if you can’t get prequalified for a personal loan?

If you go through the prequalification process and are turned down for a loan, you might not be sure what to do next. Here are some steps that could help if you get denied:

  • Ask the lender what happened. Reach out to the lender directly for an explanation of why you were turned down. It might still be possible to get approved or if not, you can use this insight to improve your chances for the next time.
  • Check your credit score and report. You can check your Vantage 3.0 credit score for free through LendingTree, but it might also be worth tracking down your FICO Score, as lenders commonly rely on FICO when determining whether you qualify for a loan. You can also order your credit report for a closer look at your accounts, as well as to find out if there are any errors.
  • Explore alternative options to a personal loan. Some other options might be a home equity loan, a home equity line of credit, a credit card balance transfer or a credit card with a 0% APR promotional period, depending on your situation.
  • Try applying with a cosigner. If allowed, adding a cosigner to your application could boost your chances of qualifying for a loan, as well as potentially help you get better rates.

Personal loan prequalification FAQ


What does “prequalify for a personal loan” mean?

Prequalifying for a personal loan means that a lender thinks you’re a good candidate to formally apply for a personal loan. When you prequalify for a personal loan, a lender might provide you with loan offers, including estimated APR, monthly payment and loan amounts.

Does prequalifying guarantee a loan?

No. Being prequalified for a personal loan simply lets you see if you’re a good candidate for a personal loan without putting in a formal application. However, once you formally apply for a loan, you may no longer qualify due to information that was revealed during the hard credit check.

Can you prequalify for a personal loan through multiple lenders?

Yes. Since prequalification requires only a soft credit check, you can see if you’re a good candidate for a personal loan through multiple lenders. If you have more than one personal loan offer, then you can choose the loan offer that works best for your financial situation.

Can I prequalify for a personal loan without a hard credit check?

Yes. Many personal loan lenders let you check your eligibility with a soft credit inquiry, which will not affect your credit score.

How much will I get approved for?

That depends on a few factors, including the loan amounts offered by the lender. Check the lender website to see potential terms, such as minimum and maximum loan amount. The offered loan amount will also depend on your eligibility as a borrower, including your income.

Is there a difference between getting prequalified and preapproved?

Prequalification and preapproval are typically used interchangeably, according to the Consumer Financial Protection Bureau (CFPB), though there may be some legal distinctions between the two terms. That said, the process of prequalification and preapproval can differ from lender to lender, so it’s worth researching what a specific lender means when using this terminology.

What is an adverse action notice?

The Fair Credit Reporting Act requires a lender to explain why you were denied credit. Lenders can send you this information in the form of an adverse action letter. You may have been denied credit because of your credit score, debt-to-income ratio or credit utilization ratio, for example.


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