All You Need to Know About Pre-approved Personal Loans

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A pre-approved personal loan is offered to a person whose credit report is not faulty and he has a good source of income. Though the name itself says that your loan is already approved but there is a thin chance of rejection too. A preapproved loan can turn to 'approval' or 'rejection' on the basis of incomplete documentation or multiple loan delinquencies, etc. A pre-approved personal loan is just an affirmation from the lender that one is fit for the criteria of personal loan eligibility. Here are some points on basis of which banks offer you a pre-approved personal loan. • You assess a good Credit Score and credit history. • You are regular in paying credit card bills/loan EMIs. • You have a low loan to income ratio. • Bank may have checked your income and expenses and found you eligible. • You have a good amount saved in the Savings Account and your bank knows this. The Advantages of A Pre-Approved Personal Loan A Better Negotiation Power- As the initiative of the loan is taken from the lender's end; you get the power to negotiate the interest rate. Your lender is aware that you are valued customer and will never want to lose one. So you got the better opportunity to bargain for a better opportunity for your personal loan. Quicker Disbursal of the Loan- Personal loans are known for it fast disbursal but if it is a pre-approved personal loan, it becomes even faster. The first stage of a loan sanctioning is the eligibility determination of the applicant. As the lender has already declared you as eligible, the first stage of the loan is already successfully completed. Hence the disbursement can be done only after verifying the documents. Lower Interest Rate: Majority of banks and financial institutions offer an interest rate on pre-approved loans which is lower than the general one. They offer such provision to attract the customer. Somehow, lenders are certain about the repayment of the loan. In such cases, they can offer little concession to have more and more customers.
Important Consideration Regarding A Pre-Approved Personal Loan Along with many advantages, there are some points which one must consider before opting the offer. • Every pre-approval comes with a time limit. Generally, the validity of a preapproval is of six months. One has to avail the offer within six months only. • One must be aware of the present rate of interest. One cannot take it granted that the lender is providing the best personal loan rates with the pre-approved offer. One must check the market rate before accepting the agreement. • It is true that a banks pre-approval is validated for six months but banks have full authority to revoke the same without any prior notice. • Before one sign the loan agreement one must know the terms and conditions of the lender very well. It is not only the lender who has the right to reject a loan applicant, it is the borrower too who can choose the lender whom he likes the best. One must be careful about the fees, charges, other norms of the lender so that one has not to regret the decision. It happens many a time that when a person gets to know that he got a preapproved loan, they tend to make that amount disbursed. Many people are tempted to the offers and discounts which the lender provides with the loan and apply for the same without much thinking. Sometimes even there are people who use to take such loans for less meaningful purposes. Taking a loan no matter pre-approved or not should be taken only for necessities not for fun.
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All You Need to Know About Pre-approved Personal Loans

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