Pre-approval is when a lending institutions extends an unofficial offer to you for a loan. However, this does not guarantee approval. It usually means that you meet the lenders basic eligibility requirements. Pre-approval is available to many kinds of loan. May it be personal, mortgage or car loan. They usually stand for a couple of months but will not guarantee you funding.
Here are the steps on how you could prepare for getting yourself a pre-approved personal loan:
- List all potential personal loan providers that you are interested in
There are a lot of lenders out there and they are not all the same. Not all of them would be suited for your need. First you have to check their loan range amount. Some lenders only offer a limited amount of money, some also has a minimum amount before you could submit your application. This is why it is important to first create a list so you could compare. Other lenders also consider credit scores, some only cater for high scorers while others also consider approving subprime borrowers. Another thing to check is the allowable loan term lengths. There are few institutions that only allow lending money in a short span of time. Make sure to know if this would be something that would work for you. You can even request for a personalized loan computation from them, most providers especially online offer this kind of feature.
- Narrow down your list and look for what would work best for your situation
After you have gathered all the necessary information you’d potentially need it is now time to choose which is the best one for you. If any of the lenders offered you extremely high interest rates compared to others, you may scratch them off your list right away.
Aside from the mentioned above, you also need to check if they would require you to pay certain fees. Some lenders would ask you to pay origination fees. You just have to think if it would be beneficial in the long run because some of the lenders who requires this usually offer smaller interest rates. Additionally, you need to also know if you are qualified for the loan size that you need.
- Choose the one you think is best for your situation and prepare for your application
Once you have decided which of the personal loan offers you’d like to pursue, you now need to prepare the necessary documents required by the lender. You are usually required to accomplish a personal data sheet along with some proof like driver’s license or passport. After you have submitted these, you just need to wait for your pre-approval decision.
You now have your pre-approval for your personal loan, what’s next? Usually the lender would confirm that all the necessary information you have declared are true. So be sure that everything is accurate. After this, your lender may take two days to fully analyze your application before you get your official approval. Once you have received your official approval, carefully review the loan contract and decide if you still want to pursue with the loan before you sign anything.