Pre Approved Personal Loan

Banks & NBFCs usually offer pre-approved personal loans to their existing customers based on their credit history, income, employer’s profile, etc. Such loans usually have instant disbursal and may be charged lower interest rates.

Pre-Approved Personal Loan Offers

Pre Approved Personal Loan Features

Some key features of pre-approved personal loans are as follows:

• Minimal or No Paperwork: Zero or minimal documentation is required for loan approval, since the initial analysis of your financial standing and credibility is already done before a pre-approved loan is offered to you.
• Least Processing Time: Least processing time is involved since you already meet the eligibility criteria for the loan. Once all the relevant information is verified, your loan could be approved and disbursed within a day.
• No Requirement of Collateral/Security: No collateral or security is required to avail a pre-approved loan.
• Flexibility in Repayment: Pre-approved loans generally come with a repayment tenure ranging between 12 to 60 months which you can choose as per your own convenience.
• Lower Interest Rate: Since these loans are usually offered to individuals with a good credit history and a clean repayment track record, they are offered at competitive rates of interest which are generally lower than the usual personal loan interest rates.

Pre-approved Personal Loan Interest Rates

Pre-approved personal loans are generally offered at a lower rate of interest as such loans are usually offered to consumers having a good credit profile. However, the interest rates may vary from one lender to another and depending on the applicant-based factors such as the applicant’s credit score, income, etc.

3 Things to Consider While Applying for a Pre-approved Personal Loan

1. Pre-approved personal loan is actually an ‘Invitation to Apply’ (ITA) offer and is therefore valid only for a certain period of time. The customer needs to apply in the specified time frame to be eligible for the offer
2. Ask the bank about all the applicable charges like processing fee, pre-payment charges and pre-closure charges, etc
3. Do not forget to compare other available pre-approved personal loan offers

How to pre-qualify for a pre-approved personal loan?

Banks and NBFCs offer pre-approved personal loans exclusively to their select existing customers based on their credit history, income, employer’s profile, etc. Some lenders also extend such offers to their new-to-credit customers based on factors such as their income and savings history.

Should you accept a pre-approved personal loan offer?

You should avail pre-approved personal loans only when you are in urgent need of money. However, if there is no such urgency, you should also compare the interest rates of your pre-approved personal loan offers with the personal loan rates offered by banks and NBFCs with whom you maintain deposits or have availed loans or credit cards. Then, you should also visit online financial marketplaces to compare personal loan offers (including pre-approved ones) from other banks and NBFCs. After considering all options, you can apply for the one that offers the lowest interest rates as per your eligibility.

FAQs on Pre Approved Personal Loan

What is a Pre-approved Personal Loan?

Pre-approved personal loan is a credit facility that banks and NBFCs usually offer to their select existing customers after analyzing various aspects of their credit profile.

How Can I use my Pre-approved Personal Loan?

Like personal loans, pre-approved personal loans too come with flexible end-usage. The loan proceeds can be used for covering medical emergencies, home renovation, wedding, vacation, business operations, etc. except for any speculative activities.

Can a Pre-approved Personal Loan be denied?

Lenders extend pre-approved personal offers to their existing customers based on their credit profiles. The approval can be denied if the bank notices adverse changes in the customer’s credit profile during the verification process.

What are the documents required to avail a Pre-approved loan?

Since most pre approved personal loans are offered by banks to existing customers no new/additional documents are required as the bank already has your income, KYC, etc. details in their database. However, in some cases such as when a pre-approved loan is offered to a new customer, banks generally require the following documents:

• Income proof
• Address proof
• ID proof

How can I use my Pre-approved Personal Loan?

Pre-approved loans come with flexible end-usage and can be availed to meet any personal financial need.

Are there any charges associated with Pre-approved Loans?

Yes, like personal loans, pre-approved loans may also have certain fees and charges associated with them. Some common fees and charges associated with pre-approved personal loans are processing fee, prepayment fee, part-payment charges, etc. However, some lenders may offer special additional benefits and discounts to certain customers such as processing fee waiver, EMI holiday for a certain number of months, etc.

Read: Is Personal Loan Prepayment a Good Idea

Can I avail a Pre-approved Personal Loan anytime?

No. Unlike regular personal loans, pre-approved loan offers are usually available only for a specific period of time.