Quick Guide to Pre-approved Personal Loan
Congratulations! You have been offered a pre-approved personal loan of Rs. 2 lakhs. Visit our nearest branch for a few formalities, and avail immediate loan disbursal.
How many times have you received an e-mail of this sort or a call from a telemarketing executive saying something similar? Many a times, right? So, is it worth taking a pre-approved loan (if in case you do need the money)? Let’s find out!
All about pre-approved loan
Pre-approved loan basically means that the bank has agreed to extend a loan to you subject to fulfillment of their pre-decided criteria. Banks analyze your past track records such as monthly inflows and outflows and assess whether you will be able to repay the loan amount comfortably, and then make the offer. However, these loans do not imply guaranteed sanctions, because that is purely subject to successful verification of all the relevant documents. While the procedure is almost similar to a regular personal loan application, a pre-approved loan speeds it up further.
Advantages of pre-approved personal loan
- Quick Processing: Since the bank itself has indicated your eligibility amount and is aware of your track record, the time taken for this personal loan approval is much less than the regular one and the loan is disbursed quickly.
- Low Interest Rate: Majority of banks and financial institutions offer low interest rates for pre-approved loans as they are sure of the customer’s ability of timely loan repayment.
- Power to Negotiate: You can leverage the loan offer to negotiate for better terms and conditions. Since the bank is willing to lend you, you have more power to bargain for better opportunities and then apply for personal loan.
Documentation is important: While pre-approved loans/personal loans online may require less time, it will require the exact same documents like any other regular personal loan. Documentation holds mighty importance and any discrepancy may lead to cancellation of the loan offer.
Time limit: Pre-approved loans are actually an ‘Invitation to Apply’ (ITA) offer and are therefore valid only for a certain period of time. The customer needs to apply in the specified time frame to be eligible for the offer or the benefits it brings along.
- Costs involved: While these loans come with a lower interest rate, the other costs involved remain unchanged. For example, the loan processing fee has to be borne by the customer. You can take this loan to avail the best personal loan rates, but other applicable charges cannot be waived off.
It always pays to do your bit of assessment before opting for any loan option. Go for it only if you need it, and not because you have been offered a great deal. These loans obviously have their own share of advantages but choosing a suitable loan amount and doing a comparative analysis is always advisable.
[Also Read: 8 common Personal Loan Mistakes to Avoid]