Congratulations! You have been offered a pre-approved personal loan of Rs. 2 lakh. 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? Quite frequently, right? So, is it worth taking a pre-approved loan (in case you need money)? Let’s find out!
What is a Pre-Approved Personal Loan?
A pre-approved personal loan is offered by the banks to an existing creditworthy customer who has repaid all his past EMIs on time and has a good credit score. This type of loan requires minimum documentation and short processing time as the bank is already aware of your financial history.
Please note that a pre- approved loan is offered with a fixed loan amount, let’s say of Rs. 2.05 lakh and a fixed tenure. If you want to avail more funds or wish to change the tenure, you will have to apply for a personal loan separately by filling an application form.
What are the Eligibility Criteria of a Pre-Approved Personal Loan?
A pre-approved personal loan is offered to the long standing customers of the bank having a decent credit score, sufficient income and obviously an excellent repayment record.
To know if there is a pre-approved loan offer available for you, you can easily check with the bank by either calling the customer care of the bank or visiting the nearest branch of the bank or logging in to your online account or downloading the app.
What Are the Documents Required for a Pre- Approved Personal Loan?
- ID Proof: Aadhaar Card, PAN Card, Driving License, etc.
- Address Proof: Utility Bills, Voter ID Card, Aadhaar Card, etc.
- Income Poof: Salary slips of last 3 months, Bank account statement, Form 16, ITR, P & L Statement, etc.
What Are the Benefits of a Pre- Approved Personal Loan?
- Preferential interest rates: You might be offered a preferential (lower) personal loan interest rate if a pre- approved offer comes your way. This happens because the lender has already analyzed you repayment ability and is also aware of your repayment history and current financial status
- Flexible end use: A pre-approved personal loan has no restriction on its end use and can be availed to deal with many personal reasons like wedding, vacation, home renovation, etc.
- Online application: When you are offered a pre-approved personal loan, you can easily apply for it online from the comfort of your home or office
- Minimum documentation: Since a pre-approved personal loan is offered to an existing customer and hence requires either minimum or no documentation
- Quick processing: As the bank has extended this loan offer to you, it is already aware of your track record and wants you to complete only a few formalities to process your loan application
What Are the Important Things to Consider While Applying for a Pre-Approved Personal Loan?
- Pre-approved loans are actually an ‘Invitation to Apply’ (ITA) offer and are 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
- Ask the bank about all the applicable charges like processing fee, pre-payment charges and pre-closure charges, etc
- Do not forget to compare other available pre approved personal loan offers
It always pays to do a bit of homework about the offer and the lender before opting for any loan option. Avail a pre-approved personal loan offer 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.