Personal Loan: How to Get a Pre-Approved Personal Loan? Eligibility, benefits and process explained

A personal loan is a commonly used financial instrument that helps individuals meet their financing needs. It is preferred because it does not require collateral and can be used for multiple purposes. A pre-approved loan stands out as a special type of personal loan that is offered based on the borrower’s creditworthiness.

What is a pre-approved personal loan?

A pre-approved personal loan is provided directly to selected individuals by various banks and NBFCs based on your creditworthiness and credit history. It is offered to existing customers in accordance with their repayment behavior. Compared to a personal loan, a pre-approved personal loan is easier as it requires fewer documents, making the process of getting a loan faster. Banks and NBFCs typically offer an interest rate of around 10 to 15 percent.

Who is eligible for a pre-approved personal loan?

Banks and NBFCs typically offer a pre-approved personal loan to their existing customers. However, in certain cases they also offer it to new customers. Banks consider the following factors before selecting a customer for a pre-approved personal loan.

How do you get a pre-approved personal loan?

• First check with your bank whether you qualify for a loan.
• To check your eligibility, you can visit the bank branch or official website.
• If you qualify, you can apply for a loan by filling out an application form on the bank’s website or mobile app or by physically going to the branch.
• Select the amount and term of the loan.
• You must submit the necessary documents such as ID proof, proof of address, salary statements and bank statements for at least 3 to 6 months.
• After submitting the required documents, the banks and NBFCs will verify the data.

Please note that the required documents may differ per bank. Please contact your respective banks about the required documents.

Disadvantages of a pre-approved personal loan

Validity: A lender can approve this type of loan for a limited period of time. Therefore, you should avail this loan as soon as it is approved.

Eligibility: Eligibility for a pre-approved personal loan depends solely on the lender’s discretion based on your credit history. Banks may or may not grant this loan at their discretion.

In short, a pre-approved personal loan can help you finance your emergency financial needs. It is also a reward for maintaining a good credit score and making loan payments on time. However, one must get a pre-approved loan based on their requirements, rather than just qualifying.