Personal loan pre-approval takes place before your lender submits a hard enquiry and is done to determine whether you qualify for a specific type of personal loan that they provide. The pre-approval process differs from lender to lender but involves less documentation than hard applications and is based on meeting basic eligibility criteria as set by lenders.
Personal loan pre-approvals help give customers an indication of their chances of formal approval based on their eligibility. Furthermore, pre-approval gives customers an idea of their expected repayments and what interest rate they will qualify for.
What are the basic eligibility criteria for personal loan pre-approval in Australia?
The following are the basic requirements to be met for personal loan pre-approval:
- At least 18 years old
- Australian citizen, Australian permanent residency or living here on an eligible visa
- Meet minimum income requirements (usually at least $20,000 annually)
- Currently employed or receiving regular income through full-time, part-time or casual work
- Have a good credit rating and no prior history of bankruptcy
What are the benefits of a personal loan pre-approval?
A major benefit of personal loan pre-approvals is that they give you a solid idea of what you're capable of borrowing ahead of time. If you're using your personal loan to buy a particular item, such as a car or jewellery, this gives you a clear ceiling as to how much you can potentially spend, which results in a stronger hand when negotiating on its price.
In addition, quick processing is another advantage of the personal loan pre-approval process. Once the initial credit and finance checks are complete, your lender can move on to other remaining steps, expediting the processing time of your personal loan application.
If you’re concerned about a pre-approval negatively affecting your credit score, don’t be. A personal loan pre-approval is a form of soft enquiry and will not impact your score.
What information do I need to apply for my personal loan?
-
First and foremost, it’s crucial to find out whether you’re actually eligible for your personal loan. Fortunately, our lenders are flexible with their qualification criteria, which helps more Australians apply for financing. The criteria you’ll need to meet include:
-
It’s also important to review your credit file prior to submitting your application for financing. Your past borrowing experience is represented by your credit score, which lenders look to as an indication of your ability to repay debts promptly and reliably. The higher your credit score, the more confidence your lender will have in you as a borrower. You can improve your score by paying off outstanding debts and lowering limits on your credit cards. You're free to check your credit report free of charge every three months in Australia.
-
One way to speed up the personal loan application process is to have all of your relevant documents on hand before submitting. These include:
-
Of course, you should always compare the various fees which may apply to your personal loan also. These can include:
