What is Pre Approved Personal Loan and How Does it Work

What is Pre Approved Personal Loan and How Does it Work

What is a Pre-approved Personal Loan? Pre-approved loans are highly sought after by those who wish to reduce the time and effort to get a loan. Banks and other financial institutions offer pre-approved loans to customers with remarkable credit scores and a history of timely credit repayment. It is usually used by banks to promote their loan products. These pre-approved loans help customers get loans with minimal documentation.

Additionally, they have minimal processing time, generally do not require collateral, and come with a flexible repayment tenure. The rate of interest offered varies from one bank to another and is usually between 10.49% p.a. to 14% p.a., depending on certain factors. How to Apply for a Pre-approved Loan? The process of applying for a pre-approved loan is very simple and straightforward.

The first step is to check with your bank if you are eligible for a pre-approved loan by logging in to your net banking account or requesting for details from the bank.

After that, one has to fill out and submit a loan application form which is usually available on the bank’s website, branch office, or mobile apps or requested via SMS.

Choose the amount for your loan and a convenient tenure of repayment.

After completing the verification process, the loan amount will be transferred to your bank account.

Eligibility Criteria Although pre-approved loans are easy to avail, those applying need to fulfill various criteria to be eligible for the loan. These include having a clean credit history, a good track record of repaying loans and debts on time, and being an existing customer of the bank or NBFC you are applying to.

However, some banks and NBFCs may also ask for additional documentation like your last three-month salary slip, bank account statements, employer’s details, KYC details (PAN and Aadhar), and employee ID card.

What is the Maximum Limit on a Pre-approved Personal Loan?

Typically, the maximum limit for pre-approved loans differs for each bank or NBFC.

The standardized amount in certain banks like HDFC Bank, SBI Bank, Axis Bank and Bajaj Finserv is up to Rs.25 lakhs. Certain banks like ICICI offer up to Rs.50 lakhs as their maximum limit for pre-approved loans. Differences Between Pre-approved and Regular Personal Loans Now that we know how pre-approved loans work, let’s take a look at how a pre-approved loan differs from a regular personal loan.

Regular loans usually need more rigorous assessments, while a pre-approved loan requires minimal or no documentation and paperwork for the loan to be approved. Furthermore, a pre-approved loan is typically disbursed within a few minutes, and a regular loan has a longer disbursal time ranging from a few hours to several days.

Advantages of Pre-approved Loans Pre-approved loans come with a variety of advantages and benefits. Firstly, they’re great if you need instant funds to meet urgent financial needs, and upon loan approval, it will be transferred to your bank account on the same day.

Additionally, because lenders already trust your financial profiles, they are usually offered a lower interest rate along with offers like low-interest rates, processing fee waivers and EMI holidays. Disadvantages of Pre-approved Loans Interestingly, pre-approved loan schemes also have drawbacks.

Firstly, they have a low validity tenure, and upon loan approval, the customer needs to act fast to avail of it or the offers will be altered or cancelled. On the other hand, the bank is not liable to credit the loan until your credit score or documentation is further verified. The Bottom Line All in all, pre-approved loans are a great way togain quick access to funds for urgent needs, thanks to minimal processing and documentation.

However, borrowers should be aware of the short validity period, requiring swift action. Additionally, while lenders extend these offers based on trust, the final loan approval hinges on further credit score and documentation verification.

Conclusion

In conclusion, pre-approved loans offer expedited financial assistance but require borrowers to act promptly and ensure all requirements are met for a seamless borrowing experience.

Pre-approved personal loans provide a convenient financial solution. While they come with advantages, borrowers must act promptly, as these loans have short validity periods. Always review the specific terms and conditions offered by your lender.

What is a Pre-approved Personal Loan? Pre-approved loans are highly sought after by those who wish to reduce the time and effort to get a loan. Banks and other financial institutions offer pre-approved loans to customers with remarkable credit scores and a history of timely credit repayment. It is usually used by banks to promote their loan products. These pre-approved loans help customers get loans with minimal documentation.

Additionally, they have minimal processing time, generally do not require collateral, and come with a flexible repayment tenure. The rate of interest offered varies from one bank to another and is usually between 10.49% p.a. to 14% p.a., depending on certain factors. How to Apply for a Pre-approved Loan? The process of applying for a pre-approved loan is very simple and straightforward.

The first step is to check with your bank if you are eligible for a pre-approved loan by logging in to your net banking account or requesting for details from the bank.

After that, one has to fill out and submit a loan application form which is usually available on the bank’s website, branch office, or mobile apps or requested via SMS.

Choose the amount for your loan and a convenient tenure of repayment.

After completing the verification process, the loan amount will be transferred to your bank account.

Eligibility Criteria Although pre-approved loans are easy to avail, those applying need to fulfill various criteria to be eligible for the loan. These include having a clean credit history, a good track record of repaying loans and debts on time, and being an existing customer of the bank or NBFC you are applying to.

However, some banks and NBFCs may also ask for additional documentation like your last three-month salary slip, bank account statements, employer’s details, KYC details (PAN and Aadhar), and employee ID card.

What is the Maximum Limit on a Pre-approved Personal Loan?

Typically, the maximum limit for pre-approved loans differs for each bank or NBFC.

The standardized amount in certain banks like HDFC Bank, SBI Bank, Axis Bank and Bajaj Finserv is up to Rs.25 lakhs. Certain banks like ICICI offer up to Rs.50 lakhs as their maximum limit for pre-approved loans. Differences Between Pre-approved and Regular Personal Loans Now that we know how pre-approved loans work, let’s take a look at how a pre-approved loan differs from a regular personal loan.

Regular loans usually need more rigorous assessments, while a pre-approved loan requires minimal or no documentation and paperwork for the loan to be approved. Furthermore, a pre-approved loan is typically disbursed within a few minutes, and a regular loan has a longer disbursal time ranging from a few hours to several days.

Advantages of Pre-approved Loans Pre-approved loans come with a variety of advantages and benefits. Firstly, they’re great if you need instant funds to meet urgent financial needs, and upon loan approval, it will be transferred to your bank account on the same day.

Additionally, because lenders already trust your financial profiles, they are usually offered a lower interest rate along with offers like low-interest rates, processing fee waivers and EMI holidays. Disadvantages of Pre-approved Loans Interestingly, pre-approved loan schemes also have drawbacks.

Firstly, they have a low validity tenure, and upon loan approval, the customer needs to act fast to avail of it or the offers will be altered or cancelled. On the other hand, the bank is not liable to credit the loan until your credit score or documentation is further verified. The Bottom Line All in all, pre-approved loans are a great way togain quick access to funds for urgent needs, thanks to minimal processing and documentation.

However, borrowers should be aware of the short validity period, requiring swift action. Additionally, while lenders extend these offers based on trust, the final loan approval hinges on further credit score and documentation verification.

Conclusion

In conclusion, pre-approved loans offer expedited financial assistance but require borrowers to act promptly and ensure all requirements are met for a seamless borrowing experience.

Pre-approved personal loans provide a convenient financial solution. While they come with advantages, borrowers must act promptly, as these loans have short validity periods. Always review the specific terms and conditions offered by your lender.

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