Pre-approved personal loans are short-term loans that are made available to a chosen group of customers. It necessitates minimal documentation and does not necessitate any collateral or security. To be qualified for a quick loan, you must have a strong credit history and a track record of repayment.
Many banks and non-banking financial firms (NBFC) in India provide this sort of loan facility in order to improve loan product sales, address clients’ urgent financial demands, and significantly reduce loan disbursal time. For pre-approved loans, the interest rate might range between 10.49 per cent p.a. and 14 per cent p.a. However, interest rates vary from bank to bank, and you should confirm the interest rate with the lender before taking out a personal loan.
Quick loan disbursement
If you are an existing customer of the bank or NBFC, the pre-approved loan will be sent directly into your account in a matter of days.
Minimum paperwork required
Instant loans are simple to obtain; the process is deemed simple because loan acceptance does not necessitate much documentation.
There is no need for collateral or security
Customers who have been pre-approved for loans do not need to offer any security or collateral in order to access immediate loans.
Variable loan amounts
Each person’s pre-approved loan amount is unique. The loan amount is determined by factors such as the customer’s credit history and repayment history.
You must pay back pre-approved loans in Equated Monthly Instalments (EMIs). Customers who already have an account with the bank (lender) can use the auto-debit feature to pay their EMIs. The normal repayment period ranges from 12 to 60 months.
Costs and charges
Lenders impose fees and charges on consumers both before and after the disbursement of pre-approved loans, such as processing fees, security fees, EMI bounce charges, outstation collection expenses, penal interest, foreclosure penalties, and so on. The terms and circumstances of the applicable fees and charges vary depending on the lender.
Quick funding or instant funds
Being eligible for pre-approved loans provides a safety net for when you require immediate funding to satisfy your financial obligations. If the verification process is successful, the loan will be approved and disbursed the same day within a few minutes. You may apply for the loan for any personal reason.
Competitive interest rates
If you have an excellent credit history, you may be qualified for a quick loan offer. Because you have a good repayment history and don’t fall into the lender-risk/credit-risk group, the lender will offer you a loan at a competitive interest rate.
Flexible loan repayment time
You can choose a loan repayment duration that works best for you. It normally spans from 12 to 60 months. Consider your repayment potential while deciding on a loan tenure to avoid loan default.
Existing clients who are eligible for fast loans do not need to provide any documents because the bank already has your KYC, bank, and income information in their database.
Loan application without paper
Most lenders have an online lending facility via which you may apply for a pre-approved loan by filling out and submitting an online form on their website or mobile app. Soft copies of the required papers can be uploaded in the required format to the lender’s website or mobile app.
Faster processing time
Because you have previously met the loan’s eligibility requirements, you will not be subjected to extensive examination. If all of your paperwork is in order and all of your financial information is correct, your loan could be approved and disbursed within a day.
In the case of a pre-approved loan, the bank approaches you with a product rather than you strolling in with a request. This implies you can negotiate the loan terms with your bank manager or relationship managers, such as lowering the interest rate or increasing the tenure or repayment time. However, if you submit an online application, this benefit is not available because there is no human intervention.
- Check with your bank to see whether you qualify for a pre-approved loan offer. You can check if you are qualified for a pre-approved loan by logging into your net banking account.
- Submit a loan application form that has been properly completed, which can be received from the lender’s website, branch office, SMS, or mobile app.
- Choose the appropriate loan amount and repayment term.
- After satisfactory verification by the bank and your acceptance of the offer, the loan amount will be credited to your bank account.
Documents such as bank account statements, preceding three months’ salary slips, employee ID cards, and KYC details such as PAN and Aadhaar cards may be requested by NBFCs.