Pre Approved Personal Loan
Your loan for Rs 100000 is approved. Contact your branch to avail of the offer.
You must have come across this kind of SMS, Emails, or App notifications many times.
These messages are offers of Pre-approved Loans sent out by banks, NBFCs, or other financial institutions.
What are Pre-Approved Loans?
The general process of availing any loan starts with you applying for a loan followed by verification of the documents and finally comes the loan approval. As the name says, in a pre-approved loan, the bank does all the necessary verifications and extends the offer to you. All you have to do is to accept the offer and then the funds are transferred to your account. Pre-approved offers may be extended by banks, non-banking financial institutions or even credit card issuers. These loans offers can come for all sorts of loans like personal loans, home loans, vehicle loans, etc
Which Customers are Eligible for Pre-approved Loans?
Pre-approved loan offers are extended to customers who show a good credit history and/or have a good relationship with the bank. These offers are also offered by credit card companies to their customers who have been responsible users of the credit card for several years. Having a good balance in your bank account may also be required for getting pre-approved loans. Pre-approved loan offers are often limited period offers, so you would need to avail it while it lasts.
What Happens After You Get a Pre-Approved Loan Offer?
A pre-approved loan of a certain amount will be made to you based on the details available with the lender. Once you get the offer, apply for the offer to avail the offer. You may be required to submit certain documents. These documents will be very less compared to the documentation needed for a normal loan. Once you submit the asked documents, they will be verified and the loan amount will be transferred to your account shortly. But, you should keep in mind that just receiving a pre-approved loan offer does not guarantee you of a confirmed loan. There may be many variations in the details with the bank. For Example, You might have had a good take-home salary, which might have gone down after you started your own venture. This factor will be taken into account before the final disbursal.
What are the Advantages of a Pre-Approved Loan?
Pre-approved loans come with their own set of advantages. Some of the important advantages are
Minimal documentation or in few cases it could be availed without submitting any documents at all.
The processing and disbursal of the loan take very little time as the eligibility criteria are already established and checked by the lender before making the offer.
Beneficial Interest Rates
Pre-approved loans could be charged a lesser interest rate than the normal rates as these loans are offered only to the creditworthy customers.
Pre-approved offers are sent only to a select few. So these offers are customized to suit the needs of the customers.
Ability to negotiate on the offer
In case of a pre-approved offer, the bank or your lender approaches you to avail of a loan, instead of you approaching the lender. So you might have a chance to negotiate some terms and conditions or even get your interest rate reduced by a few points.
What are the Disadvantages of a Pre-Approved Loan?
While there are some advantages to a pre-approved loan offer, there are certain disadvantages as well. They are:
Avail of a Loan Even When You Don’t Need One
When you see a loan offer, it might be difficult for you to resist the temptation of availing a loan even when you don’t need one. It is similar to you buying clothes or other things just because it is on sale.
When you avail of a loan without having a clear need, it may just add up to your financial burden
May Carry a Higher Rate of Interest than the Market
The pre-approved loan may carry a high rate of interest than the normal loan as it is being offered you and involves the least amount of processing time. You should apply for the offer only after checking the interest rates on other loans available in the market.
The Terms and Conditions may not be favourable
As pre-approved loans are offered upfront by the bank, all the terms and conditions attached to the loan may favor the bank. So, it is important to check for all the terms and conditions of the loan before accepting the offer.
No Guarantee of the Loan
Even though there is a preapproval on your loan, your bank may eventually not allow you the loan due to various reasons.
Money View - Paisa Bazaar Pre-approved Personal Loans
Money View allows pre-approved personal loans to certain selected customers of Paisa Bazaar after verification of details. Whenever you receive any pre-approved loan offer, make sure you carry out a check of the interest rate and other attached terms and conditions and apply for the offer only if you really need the loan. Once you apply for the loan, make sure you repay it on time and maintain your creditworthiness.