Prequalification vs Preapproval

The labels are marketing terms that vary by lender. Check whether the process uses a soft or hard inquiry and whether the offer is conditional.

Labels are not standardized

One lender’s preapproval can resemble another lender’s prequalification. Neither word alone guarantees final approval, rate, or amount.

Ask about the inquiry

A soft inquiry does not affect scores. A hard inquiry can. Confirm which one will occur before authorizing an application.

Conditional offers

Final approval can depend on verified income, debts, collateral, property, identity, and updated credit information.

Compare real terms

Use APR, fees, required cash, repayment term, and total cost rather than the strength of the label.