All About Pre-Approved Personal Loans
You would have regularly got calls or SMSes from bank officials or bothersome telemarketers expressing that you’re qualified for a pre-approved Personal Loan. You would have additionally observed a similar message fly up on ATM stands after you’ve pulled back cash or checked your adjust. You would have seen a similar when you sign in to your bank’s net saving money entrance as well. Isn’t that so? These are really limited time exercises completed by the banks to push pre-affirmed credits and increment their advance deals.
All in all, what precisely is a pre-endorsed Personal Loan? You definitely know what a Personal Loan is, isn’t that so? In the event that you don’t, at that point here goes – A Personal Loan is essentially a kind of unsecured advance which you can benefit from banks or Non-Banking Financial Companies (NBFCs) without providing any guarantee or security.
The greatest preferred standpoint of a Personal Loan is that you can utilize it for any reason (despite the fact that we would inform against pamper use with respect to it) and no inquiries will be gotten some information about the same. Preferably, a great many people decide on a Personal Loan to take into account sudden individual costs, for example, loss of one’s activity, a medicinal crisis or to solidify their obligations. Straightforward documentation and brisk disbursals have made Personal Loans the most favored selection of advances when in critical need of cash.
A pre-approved loan is often an offer by banks to customers who have a clean credit record. The bank carries out an initial analysis of the financial standing and credibility of an individual and then decides on offering such a loan to them. The track record is checked in clearing old dues and repayment of existing loans. So, if you’ve been clearing your Credit Card or other loan dues without fail month after month, you are likely to be offered a pre-approved loan.
Reasons Why You May Have Been Chosen For A Pre-Approved Offer
There are quite a few reasons why banks consider someone eligible for a pre-approved offer. Here are a few of them:
- A good Credit Score and credit history. Psst! Check if you have a good Credit Score for FREE now
- You have been paying your loan/Credit Card dues with your bank religiously
- Bank may have checked your income and expenses and found you eligible
- Banks find you a credit-worthy individual
- You have saved up a good amount of money in your Savings Account and your bank knows this
How Do You Get The Pre-Approved Personal Loan?
Keep in mind that pre-endorsement does not really imply that the bank is will undoubtedly give you the loan. There will be many customs which should be satisfied before the real payment of the advance.
The strategy took after for a pre-endorsed credit is like some other Personal Loan and you’ll need to submit significant reports keeping in mind the end goal to benefit the advance. The handling time, for this situation, possibly lower as the bank has effectively completed a credit check and thinks of you as a credit-commendable person.
Since pre-approved offers are usually made by banks with which you already have a relationship, they wouldn’t require many documents. However, it is wise to keep the following handy if you’re looking to avail a loan:
- Salary slips – 3 months at least
- Bank statements
- ID proof
- Residence proof
- PAN card
What Are The Benefits Of Getting A Pre-Approved Loan?
As a customer, if you opt for a pre-approved loan, you can enjoy quite a few benefits. Here are a few:
- Increased bargaining power since it is the bank that wants you to take a loan without you requesting for one. You’ll be able to negotiate loan terms and reduce the interest rate, extend the tenure, increase the loan amount, etc.
- One of the biggest advantages of a pre-approved loan is the reduced processing time. If you’re eligible for a pre-approved offer, it means that you have already met the lender’s eligibility criteria. Plus, since you would already have an active relationship with the bank, there wouldn’t be much scrutiny involved. If you’re lucky enough, your loan may get approved and disbursed in a day or two.
- There is a possibility that your pre-approved offer may come at a lower interest rate than the usual Personal Loan offers as the bank is trying to push its products to meet its targets.
- This is a great tool to get some additional funds in times of urgent requirements and comes with the convenience of repaying through easy EMIs.
- And if you actually need a Personal Loan, going for the pre-approved offer makes sense as you’ll surely get special discounts such as EMI advantages, processing fee waivers, part-payment options, etc.
Are There Any Disadvantages?
Obviously, a pre-endorsed advance offer is for sure a sweet money related arrangement. Be that as it may, it without a doubt isn’t without drawbacks. Regularly individuals get enticed to profit such pre-approved Personal Loans and wind up spending superfluously on things that they could have effortlessly managed without. In this way, benefit such offers just in the event that you have a need and not as a result of the advantages or rebates appended with the offer. Here are a few disadvantages of pre-approved offers:
- These offers are time-bound. So, if you really want a pre-approved loan, you’ll have to apply for it before the offer expires.
- Your bank may have made you a pre-approved offer, but it is not bound to sanction the loan to you. At any time, the bank can choose to revoke the offer.
- There are chances that the interest rate offered is higher than the market rate. So, always make sure that you’re aware of the market trends.
- Before you agree to the terms and conditions, keep a watchful eye on the fees and charges associated with the loan offer. Or you’ll just regret later!
Just Summing Up
A pre-approved loan offer is basically a bank’s attempt at cross-selling other products based on the information they have about any product(s) you hold with them. The loan offer is usually made based on the bank’s evaluation of your repayment capacity, but they will lend only after they validate their assessment.
