A pre approved personal loan is a loan granted to a customer by a financial institution. A customer with good credit is eligible to receive this loan. Individuals with a steady income can apply for a personal loan. Due to these reasons, pre-approved loans are offered to customers with good financial standing since lenders are aware of their financial status.
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Are pre-approved loans guaranteed to be approved?
Yes. However, the loan does not guarantee zero documentation, but it does offer excellent rates and charges. Before loans are sanctioned, they are verified for documents and loan eligibility. Therefore, you must understand and meet the lender’s eligibility requirements for their pre approved offers.
Less paperwork but more benefits
Since pre-approved loans require the least paperwork, they are beneficial for customers. In other words, the bank already has the applicant’s documents on hand. Additionally, the interest rate on this loan is lower. Pre-approved loans are traditionally offered by lenders to engage their customers with additional benefits and are generally for a limited individuals. Customers can directly check their pre-approved offers on their respective financial institution’s website to determine whether this offer is available and whether they are offered a pre-approved loan.
Pre-approval loan eligibility criteria
There are different eligibility requirements for each type of pre-approved loan. A pre-approved loan has the same set of eligibility requirements as any other loan, and customers must meet them. Banks and financial institutions will lend to customers who meet the criteria. Pre-approved loans must meet the following criteria:
- Credit scores or CIBIL scores must be good.
- An applicant must maintain a healthy bank balance.
- Repayment history must be good for the applicant.
- They must have a good income.
- The applicant must prove savings records.
Documents needed for pre-approval of loans
Existing customers of the bank are offered pre-approved loans. The application process is straightforward, with minimal documentation needed. In order to apply for pre-approval loans with another account, you will need a list of documents. Documents required for pre-approval loans include the following:
- The bank requires six months’ worth of bank statements.
- The applicant requires payslips from the past three months.
- Applicants need to prove their identity to the banks.
- Proof of address is required from the applicant.
- Last but not least, the applicant must produce a PAN or e-PAN.
Fast processing and disbursement
The banks have already checked your creditworthiness and confirmed it. They will process and disburse the loans shortly after they approve the loans. The banks will deposit the funds directly into your account.
Interest rate
The banks give out direct loans to their customers. As a result, customers receive competitive interest rates. Interest rates vary based on the disbursed loan amount, your ability to pay back, and EMI frequency. Use a personal loan EMI calculator to determine an approximate interest rate before applying for a loan.
The flexibility of the loans
Pre-approved loans have a lot of flexibility. With flexible repayment, we mean that the customer has the option to choose a budget-friendly repayment cycle. If necessary, the repayment period can be extended up to 60 months.