Making Sense of the Pre Approved Loan in Personal Finance

What does it mean to get a pre approved loan? How does it affect your borrowing capabilities? This article dives into the ins and outs of pre approved loans, exploring their implications and how they might fit into financial planning.

While SocietyOne doesn’t offer pre approval, we offer detailed personalised quotes and free credit score eligibility checks through the MONEYME app before you proceed with your application. Join us as we make the borrowing process more transparent and easy to understand.

What is a pre approved loan?

Overview of pre approved loans

A pre approved loan represents a lender’s initial vote of confidence in a potential borrower. It involves a credit application specific to the loan type, be it a mortgage or a car loan.

The lender examines your credit and other financial details to determine a lending amount. Successfully navigating this process earns you a pre approval letter, signifying a lender’s willingness to extend a certain loan amount for a limited time. This letter is just an offer, though, not an ironclad commitment.

Dispelling pre approval myths

It’s crucial to distinguish between a pre-qualified and pre approved loan; they are not the same. Pre-qualification is an initial, surface-level assessment based on self-reported data and doesn’t necessitate a credit check. In contrast, pre approval is a more thorough investigation, typically incorporating a credit check.

Another common misconception is that a pre approved loan is a one-and-done deal. The reality is that pre approval status can change. It’s subject to revision or withdrawal if there are significant alterations in your financial situation or if new information emerges that impacts your creditworthiness.

Given this, instead of seeking pre approval, you can also look for a lender that lets you gauge your eligibility and provides you with a personalised rate without impacting your credit score.

Loan eligibility and credit score

SocietyOne’s loan eligibility criteria

Your financial journey with SocietyOne begins with understanding our eligibility criteria. We’re dedicated to responsible lending, ensuring our loans align with your financial well-being. To qualify, you must:

• be at least eighteen years old;
• hold Australian citizenship or permanent residency;
• have an annual income of at least $30,000; and
• maintain a good credit profile.

Meeting these criteria is the first step towards securing a loan that fits comfortably within your financial landscape, a principle we hold dear at SocietyOne.

Our Credit Score Tool

Your credit score is a crucial factor in determining your loan approval and rates, and checking your credit score could give you an idea about your eligibility for a loan. The team at SocietyOne ranks loan offers into tiers and uses risk-based pricing. A good credit score means a higher grade. The higher the grade, the better chances you have of qualifying for a low-interest loan.

At SocietyOne, we want to empower you with the knowledge and tools you need to confidently navigate your loan process. We are now part of the MONEYME Group, and you can access a credit score tool for free by simply downloading the MONEYME app. This provides an easy way for you to check your credit score and eligibility without impacting your credit rating.

Our Credit Score Tool on the MONEYME app is powered by Experian and lets you check credit scores free of charge. It’s only a soft credit check, meaning it won’t impact your score. For a smooth experience, have your driver’s licence number ready for identity verification.

Frequently Asked Questions (FAQ)

Does pre approved mean you will get the loan?

In short, no. Pre approved finance is a positive indication from the lender about your likelihood of loan qualification based on your current financial data. However, it’s not a guarantee of instant loan approval.

The pre approval outlines a maximum loan amount, but this is only an estimate as you may not be able to borrow the entire amount. While online pre approval can be a helpful step in making your offer more attractive to sellers in the case of home loans, it’s not the final word on your loan approval.

What are the advantages of getting a pre approved loan?

It gives you a better idea of your borrowing capacity, aiding in effective budgeting. This knowledge is particularly helpful for a home loan, setting realistic boundaries for your house hunting.

Moreover, home loan pre approval can typically boost your negotiation power, putting you on par with cash buyers. It signals to sellers that your financial groundwork is solid, a significant plus in competitive markets.

Despite these advantages, it’s important to remember that pre approved loans generally require a hard credit check, which could impact your credit score. Plus, a pre approval isn’t a firm guarantee of your loan offer.

At SocietyOne, while we don’t offer pre approved loan options, we can provide you with a personalised quote based on your unique credit profile. This initial step furnishes you with a tailored insight into your potential loan terms, empowering you to make informed financial decisions that resonate with your goals.

What information is required for a loan pre approval?

Typically, lenders will ask for personal identification, proof of income, asset and liability details, and credit history. The exact requirements can vary depending on the loan type and the lender’s policies.

At SocietyOne, you should have the following information handy to apply:

• Personal details like your name and address
• Identification such as a driver’s licence or passport
• Proof of address, for instance, a utility bill
• Income evidence through payslips or bank statements
• Information on daily expenses and other debts

For a secured personal loan, additional details like the registration certificate and proof of insurance for the asset are necessary. Preparing these documents in advance can significantly streamline your application process.

Your partner in financial empowerment

At SocietyOne, we redefine cash loans online with our tailored solutions. You don’t have to settle for payday loans online, as our fast online loans are designed to be quick and hassle-free. As one of the trusted digital loan providers in Australia, we specialise in both unsecured and secured personal loans crafted to fit your unique needs.

We’re your partner in your financial journey, providing tools and tips to enhance your creditworthiness and ensuring you always get a fair offer. Whether you want to calculate car loan repayments, loans for debt consolidation, or home renovation loans, we’ve got an intuitive loan estimate calculator to help you calculate loan interest rates and repayment amounts.

With no hidden fees, a straightforward online application process, and risk-based pricing, we’re committed to offering a faster, fairer deal, as we are now part of the MONEYME Group.

Get your personalised rate today!