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What It Means to Be Pre-Qualified for a Loan

Before you're ready to submit a loan application, you might be curious about how much you can borrow. With a pre-qualify tool, you can have a better idea of how much you can afford for your next car. Read on to learn more about what a pre-qualification means and how to get one.

What does pre-qualify mean?

A pre-qualify offer generally means a preview of what you may be approved for. Based on some basic information you provide on your financial situation such as annual income, lenders can give you an expectation of how much credit you might qualify for.

Keep in mind that getting pre-qualified does not guarantee that you will be approved eventually. Because the information you provide is not yet verified, the amount and terms might change once you go into the actual loan application process. The more accurate your information is, the smaller the gap will be.

Does pre-qualifying affect my credit score?

The best advantage of getting a pre-qualify offer is that it includes only a soft credit check, which does not impact your credit score. If you are still shopping around for big purchases and want to narrow down your choices by knowing how much you may be able to borrow, getting a loan pre-qualification is ideal and does no harm to your credit history. 

If you're pre-qualified, you can choose to move forward and apply for the loan, but you’re not obligated to act unless you want to.

Pre-Qualified v.s. Pre-Approved: Which one should I get?

While pre-qualifications are based on the information you provide, for car loans, pre-approvals usually verify that information with a hard inquiry, which makes them a step closer to the actual loan terms you will eventually receive. Since getting a car loan pre-approval usually requires more information and a closer check, the process also takes longer than getting pre-qualified.

  • If you’re still shopping around and understanding options: Getting pre-qualified suits you better. Pre-approvals usually come with hard inquiries, which stay on your credit report for two years and will often lead to a slight credit score decrease.
  • If you're close to buying that new car: Consider getting pre-qualified and then pre-approved. Since you would want a result that’s closer to the actual terms you ultimately receive, you will need to provide more information and go through a credit check.

Remember that different lenders might have different processes and policies for pre-approvals and pre-qualifications. Make sure you understand them and how they might impact your credit score.

How to pre-qualify for a car loan?

Getting pre-qualified for an auto loan is much easier and quicker compared to an actual loan application. Simply enter your basic information and within minutes, you can find the credit, interest rates, and monthly payment amounts you may qualify for. With Seattle Credit Union, there is no cost or obligation to pre-qualify for either an auto loan, personal loan, or credit card.

No vehicle information is required for a car loan pre-qualification, so it's ideal to get a glimpse of your potential budget before you start shopping. Learn more about Seattle Credit Union’s pre-qualify tool and process at

Pre-Qualify Now

After you’re pre-qualified

If you like what you see, you can continue the process and submit an auto loan application. If you're not ready yet, you can still walk away better informed without harming your credit.

To learn more about Seattle Credit Union's auto loans and competitive rates, visit

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