Are Pre-approved Personal Loan Interests Calculated Monthly or Annually?

Are you in urgent need of money and looking for some easy options? Then, pre-approved personal loans can be a great option. Many banks and other financial institutions offer them from time to time. Pre-approved personal loan have annual interest rates. You repay the amount through Equated Monthly Instalments (EMIs).

So, if you want to apply for a pre-approved personal loan or know every detail about them, then keep reading. This article will cover every detail about them, along with their interest structure, whether it is monthly or annually.

What is a pre-approved personal loan?

A pre-approved personal loan is almost the same as a personal loan. The difference is that it is an instant loan and is offered to some selected customers only. For pre-approved personal loans, all the initial screening has already been done by the bank, so the rest of the process can be completed very quickly.

Benefits of getting a pre-approved personal loan

The benefits of getting pre-approved loan offers are various. Here are a few examples:

• Quick disbursal – In pre-approved personal loans, the disbursal of the amount of the loan is very quick. Sometimes it is done in a couple of hours.
• Fewer documents – Pre-approved personal loans require very minimal documents. This is because the banks already have your information and it has already been approved.
• Low-interest rates – The interest rates of pre-approved personal loans are low and competitive. This is because banks offer them to increase the sale of loan products.
• Negotiation and discounts – As banks offer pre-approved personal loans, they offer many discounts and negotiable terms with them.
• No security – There is no need for security to get pre-approved for personal loans.

The eligibility criteria for getting a pre-approved personal loan

As pre-approved personal loans are offered by the banks, they generally set their eligibility criteria. It may slightly differ from one bank to another. Some common eligibility criteria are as follows.

• Your credit score is very good. It means it is above 700 or 750.
• You pay your credit card bills on time and do not max them out.
• You might have taken a loan from the bank and paid it on time without any delay.
• The bank might have checked your overall credit history and found it creditworthy.
• The bank might also have checked your income and expense ratio. If your expenses are very low compared to your income, then it is a good sign that the bank might have noticed.

Are pre-approved personal loan interest monthly or annually?

Pre-approved personal loans come with annual interest rates charged on the principal amount you borrow. You have to repay it through EMIs, which include the principal amount, the interest charged, and other fees if applicable. You have to pay your EMI by the due date every month, or you can choose auto-deduction from your savings account if you have any with the bank.

The annual interest rates of pre-approved personal loans at some of the banks are as follows.

ICICI Bank	10.75% onwards
Axis Bank	10.49% onwards
SBI	10.55% onwards
HDFC	11% onwards
Kotak Mahindra Bank	10.99% onwards

How to apply for a pre-approved personal loan?

To apply for a pre-approved personal loan, you can follow the following steps.

• Firstly, check if you are eligible for a pre-approved personal loan or not. You can check this by visiting the bank branch or even online. There are eligibility calculations available for pre-approved loans online.
• If you are eligible, then fill out the application form for the pre-approved personal loan.
• Apply with all the required documents.
• Wait while the bank processes your application. In most cases, it only takes a few hours, but it may take a few days too.
• Finally, you get the loan amount in your account.

Though there are various advantages to getting a pre-approved personal loan, you may have to take care of a few things. Let us have a look at them.

• There is no guarantee of getting a loan if it is pre-approved. So, it is best if you check with the banks directly before making any commitments.
• Banks offer them to increase their sale of loan products, and on a promotional basis. So they may only be available for a limited time.
• There may be some extra charges involved.

How are pre-approved personal loans different from personal loans?

The pre-approved personal loans are different from personal loans in the following aspects.

• Eligibility – Pre-approved personal loans are for selected customers of the bank only. Whereas anyone can apply for personal loans.
• Disbursal time – The time taken to disburse the pre-approved personal loans is way less than the time taken for personal loans.
• Offer period – Pre-approved personal loans are available for a limited period only. Whereas personal loans are available all the time.
• Documentation – The document requirement for pre-approved personal loans is less than for personal loans. The banks already have your KYC.

FAQs

1. Should one accept an offer of a pre-approved personal loan?

You should consider your financial needs while considering accepting the offer of a pre-approved personal loan. You should not simply accept it because you were given it.

2. How much money can be borrowed through a pre-approved personal loan?

There is no fixed amount that you can borrow through a pre-approved personal loan. It depends on various factors like your income, credit score, current expenses, bank policies, etc.

3. For how much time can one borrow money through it?

The time for which you can borrow is usually between 12 and 60 months.

Pre-approved loans are becoming more common day by day. Their easy accessibility makes people use them more, even if they are not in need. You should be mindful whenever you get an offer or want to take out a loan. If you are unable to repay it, it will have a negative impact on your credit score.

We hope that now you are clear about all the information about a pre-approved personal loan and its interest charges. If you need to consult about it or any other financial need, you can contact a good institution like Piramal Finance. We have been in this industry and assisting customers for over 40 years.