How to get “pre-approved” for a personal loan

When you initially apply for a personal loan, your application generally won’t be approved immediately. Pre-approval is the intermediate step between applying for a loan and being fully approved and having your loan funded. Pre-approvals are also available with many other types of loans, car loans, mortgages and even credit cards.

Most lenders, including the AA, offer online “eligibility checkers” that will end with either a pre-approval offer or a denial based on your basic financial situation. If you’ve been pre-approved, the lender will then invite you to submit the actual loan application. The lender will then perform a full credit check, and although it’s not common, pre-approvals can become rejections at that point.

Pre-approved loans can also refer to any unsolicited offer you receive from a lender in the post or via email. These are used to encourage potential customers who may not have previously considered borrowing to apply for a loan.

You’ll then generally have a couple of months to submit a full application, but will need to meet all of the lender’s requirements. Even if you receive a pre-approval notice, you still may not qualify for a loan if your application fails to satisfy the loan eligibility criteria.

1. Find a lender.
2. Fill out an “eligibility checker” form.
3. Wait while the lender reviews your application. This process is usually automated.
4. Receive your pre-approval decision.
5. Complete the official application.

Alternatively, a good “matching service” can check your eligibility with multiple lenders in a matter of minutes.

It’s worth noting that in many cases, pre-approval takes place online within just a few minutes. This is because the lender and its underwriting team haven’t evaluated your application yet and are using software to analyse the information you supply. On-the-spot pre-approvals are often nothing more than indications that you may qualify for a loan.

If you’ve received a letter from a lender that says you’re pre-approved, then this process doesn’t apply to you. The lender has used information available to them to determine that you may be eligible for one of their products.

Your lender will likely contact you to confirm the information you’ve submitted if you’re pre-approved for a loan. Be sure everything is accurate. At this point, your lender may take a day or 2 to fully underwrite your loan application, but you may still be denied. If you do receive an official approval, review your contract carefully and decide if you still want to move forward with the loan.

Yes, while both terms are used often, they actually refer to slightly different types of approval.

Pre-approval is the lender’s initial check to confirm your credit score, income and personal details align with the lender’s qualification criteria, and is often done automatically.

Conditional approval is when an applicant needs to supply extra information to the lender to support their application. This may include pay slips, bills and employment records. If you’ve received conditional approval, it generally means that the lender is likely going to approve your loan, but still needs to gather specific information for its underwriting team before your loan can be funded.

Some personal loan lenders will use the terms interchangeably. If you’re still confused after receiving pre-approval or conditional approval, don’t hesitate to contact your lender and clear up any questions you may have.

• Your name, date of birth
• Your contact details, including your address, phone number and email
• Your employment details, including your current employer and income
• Your financial details, including your expenses and debts

Lenders provide pre-approvals based on your application. If it’s inaccurate or missing details, a lender won’t be able to offer you pre-approval. Be sure to take the time to gather the necessary documents so that your application is as accurate as possible before you begin.