How to prequalify for a home loan without hurting credit

Getting a loan is sometimes necessary when you want to make a big investment. Let’s say you want to start shopping for a new car or a house. It would be heartbreaking to find out later that you won’t be approved for a loan. And if you don’t find a way to pay soon, then you might just lose the opportunity.

Thankfully, there is such a thing as loan pre-approval—which means you can get the information about if you’re approved and how much of a loan or mortgage you’re approved for before going through the full application process.

This guide goes over everything you need to know about how to get pre-approved for a mortgage or loan without a hard credit check.

• What is Loan Pre-Approval?
• How Does Mortgage or Personal Loan Pre-Approval Work?
• Hard Inquiries: What Are They?
• How to Get Personal Loan Pre-Approval Without a Hard Inquiry With Stilt
• Read More
• Final Thoughts on Getting Pre-Approved Without a Hard Credit Check

What is Loan Pre-Approval?

From the name of it, you might think it’s an actual approval for a loan. However, while it might be very close to that, it’s not actually an approval.

Simply put, when you wish to get pre-approval for a loan, you send an application to the lender with the necessary documents. They will then let you know if you are likely to be eligible for a loan or not, and if so, how much.

Getting pre-approved for a mortgage or other type of loan allows you to shop in confidence knowing how much you can afford.

How Loan Pre-Approval Works

Once the application has been submitted, the lender will review your data: income, credit, and other relevant factors.

Based on that review, they will tell you what your options are when it comes to getting a loan or mortgage. You will find out exactly how much you can borrow from a particular lender, what the terms and rates would be, and so on.

Benefits of Getting Pre-Approved for a Loan or Mortgage

Through pre-approval, you can quickly find out if you are eligible for a loan—without going through the full application process or actually taking out the loan.

This can also prove advantageous if you decide not to purchase the home, car, or whatever else you need the loan for. When it comes to a new home, for example, if someone buys it before you, you won’t find yourself with a loan that you have no idea what to do with.

When you get pre-approved, it is not necessary to also borrow the money. You just get your facts straight. If you get another attractive offer from a different lender, you are free to make your choice between them, as there are no obligations.

Just be sure to disclose the true value of what you are intending to buy. This way, the chances of the loan falling through will be much smaller.

What Is the Difference Between Pre-Approval and Pre-Qualification?

Technically speaking, there are hardly any differences between pre-approval and pre-qualification—particularly when it comes to personal loans. Depending on the lender, the term may even be used interchangeably.

Pre-approval is generally associated with large loans, such as a mortgage. You may even opt for a credit card that has been pre-approved by your bank or the one who has issued the loan.

How Long Does the Pre-Approval Process Take?

The pre-qualification process can last a few hours—or it may be done within just a few minutes. It mostly depends on the availability of the staff—particularly if you choose to do it online.

If you get pre-approved, you will be guided through the final process—the actual loan application. This is where you submit the documents necessary to confirm the pre-qualification information you have previously given.

How Does Mortgage or Personal Loan Pre-Approval Work?

Getting your loan pre-approved is one of the preliminary steps necessary to get the funding you need for your purposes—regardless of what they may be. It provides the lender with a review of how creditworthy you are—and ends with the average offer you’re eligible to receive.

Bear in mind that getting pre-approved does not necessarily mean you will get the loan in the last stage. Sometimes, that may depend on the lender, but other times, it may depend on you. Here are the steps that generally involve pre-approval.

1) Application

The first step of the pre-approval process is sharing the information that your lender may deem relevant.

Your income and occupation are necessary to get a loan offer, but you will also have to make them aware of any existing debt you may have.

While online lenders may not be as strict as banks, too much debt might actually cause your application to be denied.

2) Soft Credit Check

Regardless of the type of lender, they will have to perform a soft credit check. Your credit history and credit score will be checked to determine whether you are a risky borrower or not.

This may be a pre-approval without a hard inquiry, but if your credit score is extremely poor, then the chances of you getting pre-approved can be very slim.

And even if you do receive the loan, the interest rate might be very high.

3) Approval or Denial

The lender can deny or they can grant you a pre-approval. If things go smoothly and you get pre-approved, then at that point you will receive some information on the loan you are eligible to receive. You will be given an offer for the loan amount, as well as the rate of the loan.

4) Acceptance

If you’ve been pre-approved and given an offer, this does not also mean that you have to take it. You may accept, or you may decline the offer—depending on your requirements.

However, if you accept, then you will have to continue with the process and follow up with more necessary documents.

Hard Inquiries: What Are They?

If you wish to go for loan or mortgage pre-approval without a hard inquiry, you need to know precisely the types of inquiries out there.

Hard inquiries (also called “hard checks”) are exactly what make the borrowing process more difficult—as this “hard pull” literally pulls out a full credit report.

Since hard credit checks are so extensive, your credit score will be negatively affected. In addition, too many hard checks in the past few years can be a red flag to lenders.

If your credit history or score has a dark spot on it, a hard inquiry will uncover it which may lead to your request being denied.

What Are the Differences Between a Hard Inquiry & Soft Inquiry?

There is a very significant difference between soft inquiries and hard inquiries.

A hard inquiry is used when someone applies for a loan or a credit card—pulling out a full report so that the lender gets all the data they need. Hard inquiries also show up on your credit report. So, if you apply for multiple loans or get rejected, the next lender will be able to see that you have not been approved.

A soft inquiry, on the other hand, is a less extensive report that doesn’t affect your credit score or show up on your credit report. Ideally, you would find a lender that offers mortgage or other loan pre-approval without a hard check so your credit score does not get affected it.

How to Get Personal Loan Pre-Approval Without a Hard Inquiry With Stilt

If you are planning to get a pre-approval without a hard inquiry, you might want to consider Stilt. Since Stilt is not your average commercial bank, the decision on approval and interest rate is not all that difficult. Even if you are a non-U.S. citizen, the right steps might actually get you pre-approved for that personal loan.

1) Apply for Pre-Approval

Simply fill out the simple online application and upload the right documentation. The request will go through immediately, and a decision will be sent within one business day.

2) Get Approved for the Loan

Stilt will review your documents and see whether you are eligible for a loan or not. If it turns out that you are indeed eligible, you will be moved on to the next step where you will be given an offer. You can either reject or accept their offer—and if you accept it, you will be directed toward the next step.

If the provided documents confirm what you stated in the pre-approval stage, you will once more receive an offer for the loan. If you accept it, then you will receive the money in your account in as little as 48 hours—possibly even less.

3) Start Repayment

Now that you have accepted the loan, all that is left for you to do is start paying back the money.

The repayment schedule will depend on the sum of the loan—but in some cases, you can also decide for yourself how much you can afford to pay every month.

Bear in mind that if you skip your payments, you might end up with penalties. Let Stilt know if you need modifications to your payment schedule.

Personal Loans

Without Hard Inquiries!

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Loans for up to $35,000. No cosigner required. No prepayment penalty.

Read More

• Guide to Getting Second Personal Loans
• How to Borrow Money for a Downpayment
• Principal Vs. Interest: What’s the Difference?
• What is Conditional Loan Approval?
• What is a Credit Reference?

Final Thoughts on Getting Pre-Approved Without a Hard Credit Check

Loan pre-approval without a hard check is a great option if you are still shopping around for lenders and you do not wish for every loan request to show up on your credit score.

This way, you will be able to see your options without any risks—therefore increasing your chances of getting your best loan approved.

You can try Stilt for pre-approval without a hard inquiry. The process is simple, and regardless of your status or credit score, the chances of you being accepted are high.

Need a Loan? Get One in 3 Simple Steps

If you are considering applying for a personal loan, just follow these 3 simple steps.

Apply

Apply online for the loan amount you need. Submit the required documentation and provide your best possible application. Stronger applications get better loan offers.

Accept

If your application meets the eligibility criteria, the lender will contact you with regard to your application. Provide any additional information if required. Soon you’ll have your loan offer. Some lenders send a promissory note with your loan offer. Sign and return that note if you wish to accept the loan offer.

Repay

The loan then gets disbursed into your U.S. bank account within a reasonable number of days (some lenders will be as quick as 2-3 business days). Now you need to set up your repayment method. You can choose an autopay method online to help you pay on time every month.

About Stilt

Stilt provides loans to international students and working professionals in the U.S. (F-1, OPT, H-1B, O-1, L-1, TN visa holders) at rates lower than any other lender. Stilt is committed to helping immigrants build a better financial future.

We take a holistic underwriting approach to determine your interest rates and make sure you get the lowest rate possible. 

Learn what others are saying about us on Google, Yelp, and Facebook or visit us at https://www.stilt.com. If you have any questions, send us an email at [email protected]

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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