What is a pre-approved loan offer?

What is a pre-approved loan offer?

When you’re hunting for a loan, it can be easy to get bogged down in a whole lot of finance jargon. To give you a better idea of exactly what you’re looking at in your search results, we’re going to breakdown one of the most commonly asked questions: ‘what is a pre-approved loan offer?’ From how it works to its handy benefits, here’s why you should keep an eye out for them when applying for finance.

What is a pre-approved loan offer?

If you’ve checked your loan offers with us recently, you might have noticed some offers are ‘100% pre-approved’. This means that, based on the information you’ve given us, the lender has approved you for that loan offer based on a soft search (the kind that doesn’t leave a mark on your credit file).

This means, unless the information in your application is incorrect, you can proceed with that loan offer confident it won’t be declined at a later stage.

How is this different from a traditional loan offer?

When you shop around for finance, the loan offers provided will be dependant on the lender running a hard search on your credit file to do their final checks. Although this is often still the case, pre-approval ratings let you know how likely you are to be approved before you commit to a hard search on your credit file.

Instead of you simply having to apply blind, we now add pre-approval ratings to our loan search results to help you decide whether to proceed with an offer.

How do pre-approved loan offers benefit me?

We know no one likes having their time wasted. Pre-approval ratings can make the loan application process quicker and easier from start to finish.

  • Protect your credit score: you have the option to choose an offer that’s more likely to help you maintain a healthy credit score.
  • Speedier process: avoid wasting time on loan offers with a higher chance of rejection.
  • Apply with confidence: you can proceed with your chosen lender with less worry of being rejected at a later stage.

Ultimately, choosing a loan offer comes down to picking the one that’s right for you. If you’re not sure where to start, take a look at our guide to comparing loan offers.

Want to take a look at your latest offers? Check if you have any pre-approved loan offers now without harming your credit score. 

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Representative 15.9% APR (Variable)

Representative example: If you borrow £7,500 over 5 years at a Representative APR of 15.9% and an annual rate of 15.9% (fixed) you would pay £177.82 per month. Total charge for credit will be £3,169.20. Total amount repayable is £10,669.20. Minimum repayment period is 12 months. The %APR rate you will be offered is dependent on your personal circumstances. Freedom Finance is a leading credit broker and not a lender.

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