Explore Personal Banking
Accounts
Deposits
Loans
Wealth & Insure
Payments
Cards
What's special about us
Customer Support
Explore all Credit Cards
Premium Metal
0% Forex & Travel
Lifetime Free
10X Rewards
UPI Cards
Fuel & Utility
Showstopper
Credit Builder
More
Customer Support
Explore NRI Banking
NRI Savings Account
NRI Fixed Deposit
GIFT City
FOREX Solutions
Transfer to NRE
Markets & Beyond
Customer Support
Explore Startup Solutions
Explore Corporate Banking
Corporate Account
Cash Management Services
Supply Chain Finance
Corporate Lending
Treasury
NBFC Financing
Customer Support
BRAVO (Auto Sweep)
Explore Business Banking
MSME Accounts
Trade Services
MSME Loan
MSME Solutions
Debit Card
Offers
Customer Support
Explore Gift City
About Us
Investors
Careers
IDFC FIRST Academy
ESG

FOLLOW US ON :

Download Now

  • App Store
  • Google Play

Notifications

  • As per amendment in the Income Tax Rules, PAN or Aadhaar are to be mandatorily quoted for cash deposit or withdrawal aggregating to Rupees twenty lakhs or more in a FY. Please update your PAN or Aadhaar. Kindly reach out to the Bank’s contact center on 1800 10 888 or visit the nearest IDFC FIRST Bank branch for further queries.

  • Activate your Credit Card within minutes and enjoy unlimited benefits

    Know More

  • One FASTag, three payments:Toll, fuel and parking

    The only FASTag with triple benefits

    Apply Now

FinFIRST Blogs

Credit Card Savings Account Personal Loan Home Loan Car Loan Education Loan Two Wheeler Loan NRI Business Banking Fixed Deposit Finance Beyond Banking MyFIRST Mobile Banking Startup Banking Investments Salary Account Current Account
Apply Now

Personal Loan

Pre-approved loan vs pre-qualified loan: Which one to choose?

Key Takeaways

  • Pre-approved loans and pre-qualified loans are two loan-related terms which, though used interchangeably, are different.
  • Pre-qualified loans give you an estimate of the loan you can get based on the information you enter.
  • Pre-approved loans provide the exact loan estimates after the lender verifies your eligibility.
  • Pre-qualified loans are suitable if you are exploring loan options. However, if you want funds urgently, pre-approved loans are a better fit.
26 Jun 2025 by Team FinFIRST
loan pre-qualification
Apply Now

Thinking about taking a personal loan? You may have seen offers saying you're pre-qualified or pre-approved. While both terms suggest you’re on the right track, they mean very different things in the lending world—and knowing the difference can help you avoid surprises later.

In this article, we’ll explain what a pre-qualified personal loan is, how it compares to a pre-approved personal loan, and why understanding the distinction matters. Whether you're planning a wedding, consolidating debt, or handling an emergency expense, this guide will help you choose the right loan path with clarity and confidence.

What is the meaning of a pre-qualified loan?


A pre-qualified loan is offered if you meet the initial eligibility parameters of the lender. You have to enter your details like:

  1. Age
  2. Existing liabilities
  3. Income

Based on this self-reported data, the lender conducts a soft enquiry on your credit score to assess your creditworthiness or repayment capacity. Based on this assessment, the lender makes a loan offer. 

READ MORE

international trip
Plan a five-star vacation without breaking your holiday budget
pre-approved personal loan​
A complete guide to getting instant approval on digital personal loans


However, this offer does not guarantee the sanction of the loan. This is just a preliminary offer wherein the lender does not do a thorough check on your eligibility. The final loan offer depends on a proper assessment, after which the loan is sanctioned.

The pros and cons of pre-qualified loans are as follows:

Pros Cons
You can check your loan eligibility instantly and easily. It does not guarantee loan approvals and sanctions.
It does not affect your credit score. The exact loan amount and interest rate you get may vary.
It helps you plan your budget if you seek a loan in the future.

 

What is a pre-approved loan?


Pre-approval is like the next stage of loan approval, which comes after loan pre-qualification. To get pre-approved for a loan, you have to submit all your financial details. Then, the lender checks your actual eligibility through a hard enquiry on your credit score. All your financial details are assessed to give you the loan offer.

If pre-qualification means testing the waters, pre-approval is when you decide to take the plunge and apply for the loan. 

Pre-approved loans have their own merits and demerits. Have a look:

Pros Cons
Gives you a clear understanding of the loan you can get and the applicable interest rate. It takes time, since the lenders verify your information.
Helps you make a budget for Equated Monthly Instalments (EMIs). Documentation is involved.
It is the first stage of loan approval and helps you get the funds. Affects your credit score in the short run due to the lender’s hard enquiry.

Pre-qualified vs pre-approved loan: Which is right for you?

The right loan depends on your needs, i.e., how urgently you seek funds. If you are just exploring options and want to know your eligibility, you can opt for pre-qualified loans. These loans provide an estimate of the loan amount and interest rate without affecting your credit score.

However, if you are actively seeking funds, consider pre-approved loans, such as FIRSTmoney from IDFC FIRST Bank. Pre-approved loans give you instant funds and help you meet your short or long-term financial needs. 

FIRSTmoney - An instant pre-approved loan for all your needs

With FIRSTmoney smart personal loans, you can borrow multiple times up to your approved offer. This helps you fund future needs that you may not have planned for.

Here’s how it works:

1. Get funds in just 30 minutes through a completely digital, hassle-free process

2. Access funds from your approved limit

3. Pay interest only on the amount you use

4. Enjoy a flexible repayment tenure that fits your budget and timeline

And here’s the best part — with zero foreclosure charges, you can repay early and save big on interest!

So, if you’re on the lookout for a smart, pocket-friendly loan option, FIRSTmoney could be exactly what you need.

What makes IDFC FIRST Bank ideal for quick personal loans?


1. Attractive interest rates starting at 9.99% p.a. for eligible customers (terms and conditions apply)

2. Zero foreclosure charges — repay your loan anytime without extra fees 

3. Flexible tenure options and EMI repayment date selection to suit your schedule 

4. Access multiple loans anytime, anywhere, for added financial flexibility 

5. Exclusively designed for individuals with a credit score of 730 and above

6. Quick and hassle-free digital application process with video KYC facility and minimal documentation 

7. Recognised among the World’s Best Banks 2025 by Forbes in partnership with Statista

Frequently Asked Questions

What is the meaning of a soft and hard enquiry?

A soft enquiry is when you check your credit score, or your information is verified without checking with the credit bureaus. This does not affect your credit score.

A hard enquiry is when a thorough assessment of your credit history is done. This typically occurs when you apply for a loan and can negatively impact your credit score.

Is collateral required for a personal loan?

No, personal loans are unsecured loans that do not require any collateral. The loan amount is decided based on your income level, credit score, and other eligibility parameters. 

What documents are needed to apply for FIRSTmoney?

You just need your PAN and Aadhar numbers to apply for FIRSTmoney. 

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirstbank.com for latest updates.

Prev

What Is Co-Lending?
Next

What is Loan Insurance & why is it Important?

Related Products

Related Articles

Download IDFC FIRST Bank App

You might also be interested in:

Savings Account

Savings Account
Personal Loan

Personal Loan
Credit Card

Credit Card
Home Loan

Home Loan
Two Wheeler Loan

Two Wheeler Loan

Contents