Q: Does pre-qualifying hurt my credit score?

No. Most lenders run a soft inquiry during pre-qualification, which lets you preview estimated terms without affecting your credit; a hard inquiry happens only when you formally apply.

Q: How quickly will I receive the money after approval?

Online lenders often deposit funds in one to three business days , and almost all loans are funded within a week once you e-sign the agreement and verify your bank details.

Q: What fees should I watch for besides interest?

The big one is an origination fee , typically 1 %–10 % of the loan amount, deducted from your proceeds. Late-payment fees are common, while prepayment penalties are rare but do exist , so read the note if you plan to pay off early.

Q: What debt-to-income (DTI) ratio do lenders prefer?

Lenders generally see a DTI below about 36 % as manageable; once your DTI climbs past the low-40 % range, approval odds drop sharply.

Question 1

Does pre-qualifying hurt my credit score?

Accepted Answer

No. Most lenders run a soft inquiry during pre-qualification, which lets you preview estimated terms without affecting your credit; a hard inquiry happens only when you formally apply.

Question 2

How quickly will I receive the money after approval?

Accepted Answer

Online lenders often deposit funds in one to three business days, and almost all loans are funded within a week once you e-sign the agreement and verify your bank details.

Question 3

What fees should I watch for besides interest?

Accepted Answer

The big one is an origination fee, typically 1 %–10 % of the loan amount, deducted from your proceeds. Late-payment fees are common, while prepayment penalties are rare but do exist, so read the note if you plan to pay off early.

Question 4

What debt-to-income (DTI) ratio do lenders prefer?

Accepted Answer

Lenders generally see a DTI below about 36 % as manageable; once your DTI climbs past the low-40 % range, approval odds drop sharply.

Question 5

Are personal-loan interest payments tax-deductible?

Accepted Answer

No. The IRS classifies interest on loans used for personal expenses as nondeductible “personal interest.” Only certain business, investment, mortgage, or student-loan interest can be written off.

Potential charge	Why it matters
Origination fee – often a small, one-time percentage taken off the top of the loan proceeds	Raises your effective borrowing cost; compare lenders that waive or reduce it.
Late-payment fee or returned-payment fee	Missing even one due date can hurt credit and add penalties; set up autopay if offered.
Prepayment penalty (uncommon but possible)	Could erase the savings of paying off early—check the note before signing.

June 2025

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