Congratulations! You have been offered a pre-approved personal loan of Rs. 2 lakhs. Visit our nearest branch for a few formalities and avail immediate loan disbursal.
How many times have you received an e-mail of this sort or a call from a telemarketing executive saying something similar? Many a times, right? So, is it worth taking a pre-approved loan (if in case you do need the money)? Let’s find out!
What is a Pre- Approved Loan?
Pre-approved loan basically means that the bank has agreed to extend a loan to you subject to fulfillment of a certain criteria. These loans are offered by banks because they want their customers to get a loan without minimum documentation and maximum convenience.
Who meets the eligibility criteria for a pre- approved loan?
Banks offer pre- approve loans to their customers based on other parameters like current balance, saving history, income and good repayment history.
Important Features of Pre- Approved Loan
- Fast processing
- Simple application procedure
- Favored interest rates
- Minimum/Zero paperwork
Advantages of pre-approved personal loan
- Lower Interest Rate: Pre- approved loans may come with a lower interest. Since the bank has already checked your income, savings, current balance and repayment history, it becomes clear that they are sure about you paying the installments on time.
- Quick Processing: Since the bank itself has indicated your eligibility amount and is aware of your track record, the time taken for this personal loan approval is much less than the regular one and the loan is disbursed quickly.
- Minimum Documentation: Pre- approved loan is offered to the existing customers and that is why minimum or no documentation is required and the process is hassle- free.
- Can Be Applied Online: When a pre- approved loan offer comes to you, you can apply for it online, from the comfort of your home or office.
Important Points to Consider While Applying for a Pre- Approved Loan
- Pre-approved loans are actually an ‘Invitation to Apply’ (ITA) offer and are therefore may be valid only for a certain period of time. The customer needs to apply in the specified time frame to be eligible for the offer or the benefits it brings along.
- Ask about the pre- payment charges and pre- closure charges.
- Look for zero processing fees.
- Do not forget to compare available features and interest rates.
It always pays to do your bit of assessment before opting for any loan option. Go for it only if you need it, and not because you have been offered a great deal. These loans obviously have their own share of advantages but choosing a suitable loan amount and doing a comparative analysis is always advisable.