Pre-Approved Personal Loan

What is Pre-Approved Personal Loan?

A pre-approved personal loan is an offer provided by a lender to select existing customers with a strong credit profile.

Unlike regular personal loans, where the borrower initiates the application, a pre-approved loan is proactively offered by the lender.

This offer is made after the lender has assessed the customer’s creditworthiness, taking into account factors such as their credit score, employment status, income, etc.

Key Insights on Pre-Approved Personal Loans:

Pre-approved offers are just ‘Invitations to Apply’. A lender may reject or withdraw your pre-approved offer during the loan application processing if there are any adverse changes in the applicant’s income, credit score, employment status, or other key financial factors. Stated below are features of pre-approved personal loans:-

Loan Processing and Disbursal Time

Pre-approved personal loans are offered by lenders to eligible existing customers who meet specific predefined criteria. Before offering this facility, banks and NBFCs conduct an initial credit assessment of their customers.

Many lenders are able to disburse these loans on the same day or within a few hours of the application. As a result, individuals facing urgent financial needs can inquire with their current banks or NBFCs to check their eligibility for a pre-approved personal loan.

Tenure

The repayment loan tenure usually ranges from 1 to 5 years, with some banks and NBFCs providing longer tenures.

Processing Fee

The processing fees for pre-approved personal loans are usually comparable to or lower than those for regular personal loans, which can be as high as 4% of the loan amount. In some cases, lenders may cap the processing fee, regardless of the loan size.

Additionally, some lenders may waive the processing fee during special promotions or festive seasons. Since processing fees can significantly impact the total borrowing cost, it’s essential for applicants to compare the fees of pre-approved loans against those of regular loans from other lenders.

Interest Rates

Most lenders provide preferential interest rates on pre-approved loans to their existing customers, but this does not guarantee the lowest rates.

It is important for prospective borrowers to compare personal loan interest rates from multiple lenders where they have existing accounts, loans, or credit cards. This ensures that borrowers can get personal loans at the most favorable terms, rather than simply accepting the pre-approved offer.

Pre-Approved Personal Loans at Paisabazaar

At Paisabazaar, we provide pre-approved loan offers from top lenders – IndusInd Bank, Axis Bank, Hero Fincorp, Moneyview, Aditya Birla Capital, and more. Have a look at the interest rates of pre-approved personal loans available on Paisabazaar.

Pre-Approved Personal Loan Interest Rates Available on Paisabazaar

FAQs on Pre Approved Personal Loan

What is a pre-approved personal loan and how does it work?

A pre-approved personal loan is a loan offer made by a lender, usually to existing customers, after analyzing various aspects of their credit profile. The lender assesses your creditworthiness  such as credit score, income, before extending this offer, making the application process faster and more streamlined.

How can I check if I am eligible for a pre-approved loan?

You can check your eligibility for a pre-approved loan by reaching out to your bank or NBFC, or at Paisabazaar to check eligibility. Lenders usually offer pre-approved loans to existing customers with a good credit history.

Will my credit score be affected if I don’t accept a pre-approved loan?

Your credit score will not be affected if you choose not to accept a pre-approved loan. Your credit score is affected only if you proceed with the loan and then fail to repay EMIs on time.

Are there any hidden charges in pre-approved loans?

Pre-approved loans usually have lower processing fees and quicker disbursal. Some lenders may charge additional fees, such as late payment fees, prepayment charges, late payment fees, or other service charges. Borrowers should verify all terms before accepting a pre-approved offer.

What is the tenure for pre-approved personal loans?

The tenure for pre-approved personal loans usually anges from 1 to 5 years, though some lenders may offer longer tenures depending on the loan amount and borrower’s repayment capacity.

How long does a pre-approved loan offer remain valid?

Unlike regular personal loans, pre-approved loan offers are usually available only for a specific period of time.

How quickly can I receive funds from a pre-approved loan?

Once your pre-approved loan is approved and all necessary formalities are completed, funds can be disbursed quickly, often within the same day or within a few hours. Some lenders, HDFC Bank offer instant loan disbursal of up to Rs 40 lakhs in 10 seconds for its eligible customers.

Is a pre-approved personal loan guaranteed?

A pre-approved personal loan is not guaranteed, as these offers are just ‘Invitations to Apply’. While a pre-approved offer increases your chances of approval, the final decision depends on a thorough review of your application and supporting documents by the lender. The offer can be withdrawn if there is any adverse change in the applicant’s income or credit score, etc.