Loans have become very popular nowadays. In fact, they have become a simplified way to buy products and services even when ready cash is insufficient. A personal loan is one such loan which is restriction-free. This means you can use the amount approved to buy the products that you want. These are usually short-term loans and can be used to meet immediate expenditures like medical bills, wedding, vacations, etc payments. Pre approved personal loan is type of loan available to those who have a clean track record and a good credit score. This loan is usually available at lower interest rates.
An important point to note about a pre-approved personal loan is that one can get this loan even without a credit history. This loan is given to those who can provide income and saving history documents.
What are the Advantages of a Pre Approved Personal Loan
Here are some of the advantages of this type of loan:
- Lesser documentation is required.
- Quick processing and approval.
- A borrower with no credit history can also get this loan.
- Flexible repayment option
An important point to note about pre approved personal loan is that its approval depends on the borrower’s credit history and policies of the loan provider
Key Features of Pre Approved Loans:
- Faster processing time.
- Almost no paperwork is needed.
- Faster processing of documents.
- Restriction-free use of the loan amount.
- The repayment tenure of this loan may vary between 12 months to 60 months.
- Foreclosures facility is available with many lenders.
Point of Caution:
A pre-approved personal loan may appear lucrative indeed. But you must know that this loan comes at a high interest rate and this can at times be a problem for the borrower. If you don’t repay the loan in the right time, it may affect your credit history.
Eligibility Criteria for a Pre Approved Personal Loan:
Banking and financial institutions Pre Approved Personal Loans based on the following parameters:
- Good repayment history
- Good credit history
- Saving history
- The current balance in your account
If you satisfy all these parameters, the bank will instantly approve the loan.
What are the Different Factors that a Bank or Money Lender may take into Account for Approving the Loan?
Similar to other loan applications, pre approved personal loans also have a protocol that one needs to
- Download the form or apply online.
- Good credit rating is required.
- Have your ID proof ready?
- Income proof is also required in some cases.
Make sure that you check with the lender and enquire about the different documents that would be required for loan application. Whether you are filling the form online or offline, you must have a copy of all the documents handy with you. Usually, personal loans are easily approved and ask for minimal documentation. But it is always good to check with the lender before applying so that there is no delay in getting the loan approved.
Points to Take into Consideration Before Choosing a Lender for a Personal Loan:
- Shortlist the names of the lenders.
- The interest rate offered by them.
- Loan repayment period.
- Time of approval.
- Look for pre-payment and pre-closure charges.
- See if you can find a lender that offers zero processing fees.
You can use pre-approved personal loans for a number of purposes, especially in the case of emergencies. Since these loans are easily approved, borrowers often tend to get incline for this loan. However, undergo an extensive research and be clarified about the repayment schemes and time and rates before applying for such loans.
