Nowadays, it is common to receive calls and messages from financial lenders informing you of the various new schemes on offer. A pre-approved personal loan is one such scheme wherein lenders send a congratulatory note informing you of having been selected. There is a good chance that you might be puzzled after having read the message, and the next step entails clearing the mystery surrounding pre-approved offers.
While everyone might have heard about a personal loan, the same does not apply to a pre approved personal loan. Most customers treat personal loans as the go-to option when they need emergency funds since it can be availed with minimal documentation and does not require collateral or security. In comparison, a pre-approved loan carries all the characteristics of a personal loan, except that it takes a shorter time for approval and does not require additional documentation.
Who qualifies for a pre-approved personal loan?
Usually, lenders select their long-standing customers as recipients of pre approved personal loan owing to being familiar with their credit history. Promotional that pre approved offers are supposed to be, you can expect a call from your lender detailing all the features of this loan with its advantages. It implies that you have been selected for this particular offer because –
- You have been a good long-term customer of the lender;
- You have had a positive credit history with the lender, courtesy of a substantial bank balance and frequent rate of the transaction;
- You have paid back any previous loan availed from the lender on time and in full without any defaults;
- Your creditworthiness in terms of income and expenditure is acceptable to the lender;
From the lender’s perspective, a customer can qualify for a pre-approved personal loan if they satisfy the following pre-requisites –
- A good credit score;
- No outstanding debt with the lender;
- Stable employment and a steady income;
- Regular payment of EMIs;
- Balance of funds being above the limit specified by the lender;
- Minimal credit risk;
Assuming that you have qualified for this loan, there is still the last stage wherein the lender would double-check and verify all the information. Existing documents like identity proof, bank statement, proof of address, and so on will be subjected to additional scrutiny before approving the loan.
Applying for a pre-approved personal loan
To benefit from pre-approved offers, you need to apply for the loan, which entails the following steps –
- Checking with the lender personally or through the website whether you are eligible for the pre-approved personal loan;
- Fill in the loan application either online or by paying a visit to the lender’s office;
- Ascertaining the amount to be received as a loan and the personal loan interest rate levied on the amount repaid;
- Decide upon the loan amount as per the inputs provided by the lender and select the tenure for repayment which is comfortable for you;
- Use the personal loan EMI calculator to determine the amount and interest which you would need to pay on a monthly basis to the lender;
At the most, lenders would take a day to cross-check the information mentioned in your form and disburse the amount to your account.
Features of a pre-approved personal loan
Before availing of this loan, you must practice due diligence and carry out research on its features. The reason lenders reserve the pre-approved personal loan for a few coveted customers is because it is –
- Disbursed within a day of the lender receiving the loan application;
- Similar to a personal loan as far as documents are concerned;
- Free from collateral or security deposit of any kind;
- Likely to vary from one customer to another depending on factors like monthly salary and type of employment;
- Subject to being repaid within the stipulated time frame as specified by the lender;
- Sure to carry additional fees and charges that lenders levy to verify and approve this loan;
As a customer, you must go through the terms and conditions that lenders attach to this loan to be aware of its nuances. After all, it is a type of personal loan. But there are some deviations that can make a difference to the overall experience.
True though it is that a pre-approved personal loan comes with multiple advantages, like swift processing and flexibility in how you use the amount, there are certain aspects that need attention. No matter how attractive and tempting the offer might seem, never sign on the dotted line before going through the terms and conditions provided by the lender. Also, make it a point to specifically inquire about the fees or any additional charges that the lender intends to levy for the service provided.
Ultimately, a pre-approved personal loan does come with several benefits. So, you can make yourself eligible by maintaining a good credit score and a positive financial history. Then apply for it as soon as the window presents itself and enjoy the plus points.