How To PreQualify For A Loan

Before you try to get a loan, you should see if you can pre-qualify. When you pre-qualify for a loan, you will have a better idea of what type of loan you can receive and for how much. This option is perfect for those that are planning on buying something large such as a home. When you get pre-qualified, you will know the price range that you will be able to look for a home at. This will help ensure that you will not fall in love with a home that you will not qualify for and will stay within your means when it comes to your finances.

In order to pre-qualify for a loan, there is some information about yourself that you will need to provide. Each bank or loan company may ask for different type of information in order for them to determine the type of loan and the amount of a loan that you could potentially qualify for. More information will need to be provided when applying for the actual loan. The pre-qualify information will be simply used as a guideline to give the bank or loan company an idea of what income you have coming in and the debt that you already have.

Be sure to have the following information available for your pre-qualifying application:

  • Name, address, and phone number
  • Driver license information and social security number
  • Employment and income information
  • Debt information for loans that you currently have or payments that your making out each month
  • The type of loan and amount that you are seeking
  • The reason for the loan that you are requesting
  • Any additional information that the bank or loan company may need in order to determine the pre-qualified amount that you could potentially receive through them for what you need

The loan officer will talk to you about a variety of options that may be open to you based on the information that you give them. They may need to ask your permission in order to pull your credit report. The credit report is going to be able to help them determine how well you pay your debt, if you have any bad standing accounts, and if you will be reliable to repay the loan that you are requesting. The credit report will be essential in the approval of the loan that you want to receive as well as your employment/income information.

You will need to advise the bank or loan company if you work for an employer or if you are self-employed. You will have to show proof of the money that you have coming in to help determine the amount of the loan that you will be able to pay back. The interest rates and the terms and conditions of the loan will be explained up front. You will even be given information on how to apply for the loan when you are ready to receive it.