Top 5 Perks of a Pre-Approved Personal Loan
A personal loan is a basic, short-term loan that may be used for any purpose. Because it is an unsecured loan, no security will be needed. People may apply for a personal loan to pay urgent personal costs, such as a medical crisis or a sudden job loss, or to support a wedding or higher education.
A pre-approved personal loan has many perks, including fairly easy paperwork, the absence of collateral, and no limits on how the money is used. However, it comes with a high rate, so it is best to have a decent credit rating before applying.
What is a Pre-Approved Personal Loan?
Banks usually offer pre-approved personal loans to people with a good record of repaying their debts. It is given at cheaper rates.
Some lenders may pre-approve a loan for a consumer who has no credit records based on factors such as income and savings records. It is often a limited-time promotion.
The pre-approved personal loan has many perks. These loans get sanctioned in a few days. You can check with your lender to see if you are eligible for a pre-approved loan offer, or you can go into your net banking account to see if you are. Keep in mind that your ultimate approval relies on your credit record and your lender’s lending standards.
Features of a Pre-approved Personal Loan
- Quick loan payments
If you are already a bank client, the pre-approved debt will be sent to your account in a few days.
- Minimum paperwork needed
Instant loans are simple to obtain; the process is termed simple because loan approval does not necessitate extensive papers.
- There is no need for assets
Users with pre-approved personal loans need to provide security or assets to obtain instant loans.
- Variable loan amounts
Each person’s pre-approved loan amount is unique. The loan amount is determined by factors such as the user’s credit history and repayment record.
- Fees
Lenders charge users fees before and after the disbursement of pre-approved loans, such as service charges, secure fees, outstation collection charges, EMI bounce charges, penal interest, foreclosure charges, and so on. The conditions and terms of the relevant fees vary depending on the lender.
Perks of a Pre-Approved Personal Loan
Bear in mind that pre-approval is only a sign of your loan eligibility. Despite being “pre-approved,” the loan request may be denied if you do not fulfill all eligibility rules during the verification process. A pre-approved personal loan has several perks, such as:
- Quick or instant funds
Being eligible for pre-approved loans provides a safety net when you require instant funding to fulfill your debt duty. If the verification process is successful, the loan will be approved and disbursed in just a few minutes on the same day. You may apply for the loan for any personal reason.
- Minimum paperwork required
The existing user qualified for pre-approved loans does not need to provide papers because the bank already has your KYC, lender, and other income details in the system. Certain money firms also provide new users with loans. In such cases, bank details, the last three months’ salary slips, a PAN card, and proof of residency (Aadhaar card, driving license, passport, etc.) are required.
- Flexible loan terms
You can select loan payment terms that work best for you. It is usually between 12 and 60 months. To avoid loan default, consider your perks when selecting the loan tenure.
- Improved money planning
When you look for a personal loan by yourself, you may need to know your loan eligibility, and if you are not eligible, your application could be rejected. But a pre-approved personal loan allows you to better plan your finances because you know exactly how much funding you are eligible for.
- Negotiating power
With pre-approved debts, the bank comes to you with its product instead of you going to the bank and asking for something. This gives you more power to negotiate with your banker to reduce the rate or boost the tenure at your leisure. This advantage is lost if you apply for a loan online because there is no human factor.
Should You Take Out the Pre-Approval Loan?
Accept such offers only if you realize how and where to put the money. Giving credit for borrowing is not a good idea. You must repay the amount plus interest. A pre-approved personal loan could be low-hanging fruit if you’ve planned ahead of time and are already looking for a loan. Before accepting the loan request, it is vital to check if the loan amount offered is adequate for your needs. Check the borrowing terms, rate, and other applicable fees.
A pre-approved personal loan is only available for a limited time. As a result, make your choice as soon as possible. Accept the pre-approved credit offer with low rates and other perks if you need the funds and can smoothly repay it. Before knowing the pre-approved loan, choose the most suitable repayment term and ensure users get the same deal as you were shown.
Conclusion
A pre-approved personal loan is a short-term loan for a select group of users. No assets or security are required, and no paperwork is required. To be eligible for an instant loan, you must have a good credit score and a track record of repayment. Although the rewards of pre-approved loans are numerous, taking a line of credit if you do not need it is pointless. Only go into debt if you truly need the money. Besides, there may be better choices than a pre-approved personal loan for your situation. You could choose a credit line instead, where you’ll get final approval and not pay any interest until you use the money from your allowed limits. If you must borrow money, make sure you only borrow what you need, not what the lender is willing to give you.
To apply for a personal loan, check out Piramal Finance and explore the products and services.