Pre-Approved Loan – Check Pre-Approved Personal Loan Offer for You!

It’s quite often that people get notified of being eligible for a personal loan through calls or messages. More often than not, most of us receive an email congratulating us and telling us that getting a pre-approved loan in our name is just a few steps away. But have you ever wondered how it happens?

While many of us know what a pre-approved personal loan is in detail, many people still don’t fully understand what a pre-approved personal loan is, who qualifies for one, how it works, and what to do if one needs one.

Let’s answer such questions to help everyone decide on the best pre-approved loan offers!

Pre-Approved Personal Loan – What is it?

A pre-approved personal loan is an unsecured loan made available to borrowers with decent credit scores and attractive debt-to-income ratios. Since they already have all the client’s information, banks and NBFCs tend to offer loans to their existing clients.

But a pre-approved loan typically has a maximum loan amount, which is determined by our income and creditworthiness. If someone receives this offer, then it implies that a favorable evaluation of their creditworthiness has been done. If one applies for a loan within the offer period, it will probably be accepted without a hitch and occasionally even immediately.

Many banks and non-banking financial institutions (NBFIs) in India offer the pre-approved loan facility to increase sales of their loan products, help clients with urgent financial needs, and speed up loan disbursement.

So, What Are the Features of a Pre-Approved Loan?

Now that we understand what a pre-approved loan is, let’s understand its features.

1. Quick Loan Disbursal: The pre-approved loan will be disbursed immediately to an account in a short period if that person is a current client of the bank or NBFC.
2. Minimal Documentation: Instant loans are simple to obtain; the procedure is seen as hassle-free because there is less need for extensive documents to approve a loan.
3. Quick Processing: The processing time is minimal because one has already met the requirements for the loan. The loan could be approved and disbursed in a day after the necessary information has been checked.
4. No Collateral or Security Required: Customers for pre-approved loans do not need to offer any security or collateral to receive immediate loans.
5. Repayment Flexibility: Pre-approved loans are required to be paid with Equated Monthly Instalments (EMIs). Customers who already have an account with the bank (lender) can also choose to pay their EMIs automatically through this method. The typical repayment period ranges from 12 to 60 months.
6. Lower Interest Rates: These loans are provided to individuals who have excellent credit histories and a record of on-time payments. Therefore, they are provided at competitive interest rates that are typically lower than those of standard personal loans.

But how would one know if they are eligible for a pre-approved loan? For that, it is crucial to know about the eligibility.

What Are the Eligibility Criteria for Availing Pre-Approved Personal Loans?

When a potential borrower’s age and creditworthiness qualify for a loan, lenders frequently provide pre-approved loans to that borrower. For instance, the bank will be aware of his income and cash flow if they have a salary account with them.

Most lenders ask for the following eligibility criteria:

• Credit Score: If someone’s credit is good, the bank may have already pre-approved him or her for a personal loan. Credit Information Bureau India Limited (CIBIL) determines the three-digit score, called the CIBIL score. A credit score might range from 350 to 900 depending on how one handles credit and payments. Any score over 750 indicates that one is a trustworthy and sincere borrower.

• Transaction History: After evaluating the transaction history, the bank can notify the customer of the bank balance and transaction rates and make him or her an offer for a pre-approved loan.

• Previous Loans: If someone has previously taken out loans and made the payments on time, their bank might pre-approve them for one. It’s also crucial to make on-time credit card payments. Even if they don’t have a credit history or payback history, pre-approved loans may be available since they have a substantial amount of funds in their bank account and a genuine income source.

Now that we all have a good understanding of what a pre-approved loan is, let’s look at the pre-approved loan offers offered by different banks and institutions to make an informed decision.

Pre-approved Loan Offers by Banks and NBFIs

Pre-approved personal loans are offered to customers with robust credit profiles. Hence, they typically have lower interest rates. However, the interest rates may differ from one lender to another and depend on applicant-based parameters such as the applicant’s income, credit score, and more.

Comparing the personal loan interest rates provided by top banks and NBFCs would give a good idea of the pre-approved personal loan interest rates offered by those lenders. Let’s take a look.

Banks/NBFCs	Interest Rates (p.a.)	Repayment Tenure
State Bank of India (SBI)	9.60% onwards	Up to 84 months
Bank of Baroda (BOB)	10.20% onwards	Up to 60 months
Punjab National Bank (PNB)	8.90% onwards	Up to 84 months
Axis Bank	10.99% onwards	Up to 60 months
HDFC Bank	11.00% onwards	Up to 60 months
ICICI Bank	10.75% onwards	Up to 60 months
Kotak Mahindra Bank	10.99% onwards	Up to 60 months
Aditya Birla Capital	14% onwards	Up to 36 months
Bajaj FinServ	13% onwards	Up to 84 months
IndusInd Bank	10.49% onwards	Up to 60 months
IDFC Bank	10.49% onwards	Up to 60 months
Tata Capital	10.99% onwards	Up to 72 months

Final Words:

A pre-approved personal loan from a bank can help someone obtain money at low-interest rates while requiring no collateral. If a customer has strong credit and is already a bank customer, they can acquire a pre-approved loan quickly and with no paperwork.

However, it doesn’t mean a customer necessarily has to accept the loan the bank is providing. One should only go into debt if one requires the money. Even if one is willing to accept the offer, it is still important to make sure they have taken a loan for the amount they need, not just what the bank is willing to offer.

If still in doubt regarding a pre-approved loan, consult a financial expert like Piramal Finance for customized loan solutions and make the best decision for the future.