Eligible For A Pre Approved Loan Offer Check Rules Here

A pre-approved loan is like additional financial assistance offered by banks and NBFCs to only those with excellent credit scores and repayment records. Pre-approved loans are personal loans usually unsecured – meaning they don’t need collateral or security. The interest rates on pre-approved loans are attractive and the lender might even waive the processing fee, foreclosure fee, and prepayment penalty. It is a short-term loan with the flexibility to choose payment terms.

These loans are especially useful around festival/wedding season when the shopping expenses are bound to go high. Banks/NBFCs offer pre-approved loans to increase their loan disbursal rate and take advantage of the increasing needs of their creditworthy customers.

Key Highlights and Benefits of a Pre-Approved Loan

What makes pre-approved loans attractive, especially when you are being offered one without asking? Let us take a look at the key highlights and benefits –

1. Instant credit – Pre-approved loans are offered by lenders to existing customers. They already know the credit history and have all the necessary documentation. Hence, the loan disbursal is very quick.
2. Attractive interest rates – Lenders like to offer attractive interest rates on pre-approved loans to increase their loan disbursal rate. Also, they are more comfortable offering better rates to customers with a good credit history.
3. Zero documentation required – Since pre-approved loans are required for existing customers, the lenders already have the necessary documents and it saves the hassle of submitting necessary documents all over again. In certain cases, lenders may ask for needed documents.
4. Contactless loan disbursal– Pre-approved loans do not require the customer to visit the bank/NBFC. The loan lending process can be completed online seamlessly.
5. Paperless application – Additional documents, if needed, can be submitted online, and hence no physical submission of documents is required.
6. No collateral or security required – Pre-approved loans are personal loans that do not require collateral or security. 
7. Higher loan amount available – Sometimes, if the lender finds your records clean and creditworthy, they may offer higher-value loans as well. This could especially be helpful when you have immediate expenses to pay.
8. Exemption from certain fees – The lender might also decide to waive certain fees like processing fees, foreclosure fees, and prepayment penalties. This, however, is totally at the lender’s discretion and will vary.
9. Flexible payment tenure - The lender may offer you a flexible payment tenure depending on their internal terms and policies.
10.  End-use flexibility – Pre-approved loans are short-term personal loans and hence you could use them for a variety of reasons like wedding expenses, medical expenses, vacation expenses, festival shopping, or just another EMI payment. 
11.  Higher asking power – In the case of pre-approved loans, the bank is offering a loan to you instead of you asking for it. In this case, the ball is in your court and you might want to negotiate the interest rate or the terms and conditions of the loan

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Let us now take a look at the benefits offered by various leading banks giving a pre-approved loan.

Leading banks and pre-approved loans – interest rate, tenure, loan amount, and more.

 

The eligibility criteria for application to a pre-approved loan

 

The application process for pre-approved loans

1. Check with your existing bank if they have any offers for a pre-approved loan for you.
2. If yes, you can show your interest in taking the pre-approved loan.
3. Let the bank check if you are eligible and if any additional documentation is needed.
4. The bank will get back to you with their offer. They will specify the interest rate and other charges. See if you want to negotiate the interest rates, tenure, or payment terms.
5. Submit any additional documentation or information required by the bank.
6. Your loan should come into your bank account within 24 hours.

How to become eligible for a pre-approved loan?

1. The most important thing to keep in check is your credit score. Banks and NBFCs like to lend a pre-approved loan to an existing customer with a good credit score. 
2. Repay your loans and EMIs on time. It will reflect well on your credit score.
3. Do not overutilize your credit limit as it can bring down your credit score.
4. Certain banks offer a pre-approved loan to someone who doesn’t have a credit history also. All they look for is a stable income source and enough savings. Try and save amply as it looks good on your account.

Things to take care of while taking a pre-approved loan –

1. A pre-approved loan is still a loan. Remember you will have to pay it back with interest. Opt for it only if you need it.
2. The rate of interest could be high if your credit history is not that good. Always check with the bank for the interest rate they are offering.
3. Also, check for the other charges. Processing fee, prepayment fee, and foreclosure fee amongst others. Make sure you know all the charges.

Pre-approved loan eligibility – Customers with high credit scores and a good credit report with no defaults are highly likely to be eligible for the pre-approved loan.

Pre-approved loan documentation – Almost zero to minimum documentation is required as the banks already have the documents of their existing customers.

Pre-approved loan application process – Check with your bank and they should be able to tell you if you can avail of a pre-approved loan and how to go about it. Usually, it is a contactless and paperless online application process.

Pre-approved loan disbursement – Because the bank already has all the necessary documents and information, disbursement is usually very quick. It could take anywhere between seconds to 24 hours but the final call is taken by the bank.

Pre-approved loan interest rates – The interest rates of pre-approved loans are usually lower than other loans.

Conclusion

A pre-approved loan is a great way to have additional finance. It offers a better interest rate, minimum to no documentation, flexibility in choosing tenure, no restriction of usage, no collateral or guarantee needed, and early disbursal of credit. Be careful when you choose to take the loan and consider all the options you have. Choose the one that best suits your needs.

FAQ of Eligible for a pre-approved loan offer Check rules here

1:I do not have a credit score. Will I be able to get a pre-approved loan?

Yes, some banks do offer pre-approved loans based on your financial discipline and savings. They would also check if you have a stable income source.

2:Can I choose the tenure of payment for pre-approved loans?

Yes, since the bank is offering the loan, they usually give the flexibility to choose the tenure as well. It could be anywhere between 12 to 60 months.

3:What if I default on the repayment of the pre-approved loan?

The bank will usually ask you to pay a fee for late payments. It is also going to show negatively on your credit report and will affect your credit score.

4:How soon can I expect the disbursement of the loan?

The disbursement is very quick and usually takes anywhere between seconds to a maximum of 24 hours. However, it is at the discretion of each bank.

5:What are the interest rates offered on pre-approved loans?

The interest rates vary from bank to bank but are usually between 10.5% to 24%.

6:Recently, I have been getting a lot of messages from banks for a pre-approved bank loan. What should I do?

Banks usually send these messages around the festive/wedding season when they know their customers are going to spend more. You can get in touch with the bank to know more about the loan. Usually, a way to contact the bank would be mentioned in the message.

7:Is there any difference between personal loans and pre-approved personal loans?

Personal loans and pre-approved personal loans, although sound similar, have few differences. Personal loans are sought after by the applicant, need documentation, and can be approved or rejected. Pre-approved personal loans are offered by the bank, need no documentation, and are already approved.