A Beginners’ Guide to Pre-Approved Personal Loan
Getting a personal loan is not difficult; the process becomes easier if the loan is pre-approved by the financial institution. There may be many reasons for which your lender considers you eligible for a pre-approved loan offer. These may include you to have an impeccable credit history stemming from the timely payment of your credit card dues or making your loan repayments on time. Your eligibility also depends a lot on your income and expenses. Moreover, you may be having a good amount in your savings or current account, thus, labelling you as a credit-worthy customer.
How Does A Pre-approved Loan Offer Help?
Getting an instant personal loan is one of the benefits of a pre-approved loan offer. Moreover, these loans come at lower interest rates as the lenders are satisfied with your credit history and hence do not fear any risk of default in loan repayment. A CIBIL Score of more than 700 is always considered a fair yardstick for a pre-approved loan offer.
Quick loan approval, fast processing, and timely disbursal are consequent to a simple application procedure that involves minimal documentation. Besides, if you get a pre-approved loan offer, you can simply apply for it online instead of going to the branch physically and submitting a loan application for the same.
The flexible repayment schedule is another advantage of seeking these loans. Applying for a loan amount that has been approved already allows intended borrowers to choose a pocket-friendly loan repayment tenure. These repayment tenures may range from six months to five years, or more depending on the loan amount and your choice of the loan tenure.
Financial institutions offering pre-approved loans to their customers do not seek any documents, thus, lending a hassle-free process. However, if you are not an existing customer of the lender offering you pre-approved loans, then you must submit the necessary documents required for a personal loan. These may include bank statements showing transactions over the past six months, last three-months’ salary slips, proof of identity and address like PAN Card, Aadhaar Card, Driving License, etc.
How to avail the pre-approved loan?
Post receipt of the offer, you will have to apply for the loan amount if you want the amount to be credited to your savings or current account. You may either get in touch with your relationship manager and complete the formalities. Alternatively, you may carry out the loan application process online.
Online loan application involves the following steps:
- Log in to your account with the lender
- Click on “Loans” and move your cursor to the “Pre-approved Loans” section
- Click on the tab “Apply Now”
- Move your cursor to a pop-up inquiring about the type of loan required. Choose among the options given and click “Apply Now”
- A loan application form will open up requiring you to fill in necessary details.
- Lenders offer pre-approved loans only for a period, which means that they must be availed during the validity period. The intended borrower must apply for the loan within the specified time frame.
- Before assenting to the loan offer, take care to check the lender’s rates, loan terms and maximum loan amount offered. Remember that the equated monthly instalments (EMIs) on your loan does not exceed 60 per cent of your net income.
- Many lenders charge added fees on the loans in addition to the loan interest charges. You must inquire about added charges like processing fees and foreclosure charges on the prepayment of the loan taken.
- Negotiate with the lender regarding processing fees.
- Though lenders offer similar interest rates, some of them offer value-added services.
- If the loan amount is too big, make sure that you buy term insurance with a similar insured value to relieve your loved ones of the loan liability in the event of your unfortunate and sudden death.