Getting a loan can be a lengthy process and may require you to go through multiple processes however, pre-approved loans can be a great way of getting loans faster.
Many banks maintain high-value customer profiles with them who have good credit histories with high credit scores and income sources.
These profiles have pre-approved loans which will be easily disbursed within a day or two if the customer wants. This ensures that the bank does not have to make the customer wait for weeks before processing the loan.
But, you might ask What Does Pre-approved for a Loan Mean? Well, In this article, we will discuss What being pre-approved for a Loan means, Types of Pre-Approval Offers, Eligibility Criteria, and much more.
What is a Pre-Approved Loan?
Banks and other financial institution usually provides pre-approved loans to those individuals who have high credit score and income.
Usually, banks provide pre-approved loans to boost their sales and increase their business. Pre-approved loans provide loans to customers with minimum documentation, minimum tenure, no collateral, etc.
The pre-approved loan comes with an interest rate and is usually a personal loan provided at an interest rate lower than usual ranging from 10%- 15%. Banks and other financial institutions send pre-approved loan offers to various customers every month based on their credit profile and history.
Whoever is interested in getting the loan contacts the bank and with minimum documentation, gets the loan amount easily.
How to Apply for a Pre-approved Loan?
The following are the steps that you’ll have to follow to apply for a Pre-approved Loan-
- Pre-approved loan offers are provided by the banks and you can check with your bank by contacting them and asking them whether they have any offer for you or not.
- Now, you’ll have to fill out a loan application form either online or by visiting the bank branch by providing your name, address, mobile number, PAN Card, Aadhaar card details, etc.
- After filling out the form, you’ll have to negotiate with the bank representative for loan amount and tenure. Although it is pre-determined, you should always try to negotiate and cut the best deals for yourself.
- The loan will be processed within a few hours and you’ll receive the amount in your bank account after completion of the verification
- Some banks may require some additional documentation, so carry all the loan documents with you when visiting the bank
Documents Required for Pre-approved Loan
The following are the documents required for a Pre-approved loan-
- Income proof- Salary Slip, ITR Statement
- Address proof- Electricity Bill, Credit Card Bill, Utility bill, etc.
- ID proof- Aadhaar card, Driving license, etc.
- PAN Card (Mandatory)
Advantages of Pre-Approved Loans
The following are the advantages of Pre-approved Loans-
- The paperwork in a Pre-approved loan is minimal which makes the entire process fast and easy for both the bank and the customers
- The processing time for Pre-approved loans is very low, sometimes if the profile is very good, you can receive your loans in a few minutes
- Since it is a pre-approved loan, the borrower does not need to furnish any document to the lender while applying for the loan
- A pre-approved Loan does not require collateral or security
- The repayment tenure of the pre-approved loan ranges from 12 to 60 months
- The rate of interest is very competitive due to high Credit scores and a high-value customer.
FAQ
Pre-approved personal loans are for high-value customers who have good credit history. A credit score and a good income source are essential for you to become a high-value customer for the bank. You can use pre-approved loans for any purpose you want.
No, your pre-approval depends on your present financial status hence, the bank will evaluate your profile freshly. Your credit score, income documents, and other documents will be re-verified before the disbursal of the funds.
Bank decides whether to provide you with a pre-approved loan or not, it is not something that you opt for.
Yes, like any other loan, there will be a processing fee for processing the pre-approved loan.
Yes, Pre-approved loans are unsecured loans which do not require any collateral.
