Pre-Approved Personal Loan
What are Pre-approved Personal Loans?
Pre-approved personal loans are instant loans that are disbursed to the selected customers. It requires minimum documentation and no collateral or security. All you need is a good credit history and repayment record to be eligible for the instant loan facility.
How to Check Pre-Approved Personal Loans?
This type of loan facility is offered by many banks and non-banking financial companies (NBFC), India aims to increase loan sales, provide quick financial help to customers, and speed up the loan approval process.
The rate of interest offered starts from 9.99% p.a. onwards for pre-approved loans. However, the rate of interest may differ from bank to bank and you must check with the lender the interest rate before availing a personal loan.
Pre-approved loans are a promotional exercise by banks to increase the sales of their loan products. There are several possible reasons why you may be chosen as an eligible customer:
- The bank might have checked your credit score and found you a good customer;
- The bank might have reviewed your credit history with them and noticed good bank balance and transaction rate;
- You may have taken a loan from the bank previously and made prompt and regular repayment;
- The bank might be monitoring your income and expenditure rates in comparison with your credit-worthiness.
Top Banks That Offer Pre-approved Personal Loans
Bank name | Loan amount | Rate of interest | Repayment tenure |
At the discretion of the bank | At the discretion of the bank | At the discretion of the bank | |
Up to Rs10 lakh | 10.60% onwards | Up to 60 months | |
At the discretion of the ban | 10.50% onwards | Up to 60 months | |
Contact the bank | 10.99% onwards | Contact the bank | |
Up to Rs.40 lakh | 9.99% onwards | Up to 60 months |
Features of Pre-approved Personal Loan
The key features of pre-approved personal loan are given below:
- Minimum to zero documentation.
- 100% digital process that makes the process seamless and faster.
- Faster approval and no waiting period.
- No collateral required to obtain these loans.
- Varying loan amount depending on various factors, such as credit history, repayment record, etc.
- Flexible repayment tenure.
- Customised offered depending on the credit history of the individuals.
- Competitive yet affordable interest rates.
Benefits of Pre-approved Personal Loans
The key benefits of pre-approved personal loan are listed below:
- Pre-approved offers can be checked before completing loan application.
- Offers can be checked by just entering valid mobile numbers and OTP.
- Ensures instant approval with no documentation and amount gets credited within 30 minutes.
- No hidden charges are applied.
- Provides flexible loan repayment tenure ranging from 12 to 96 months.
Eligibility for Pre-approved Personal Loan
The eligibility criteria that must be fulfilled by the borrower to apply for pre-approved personal loan are mentioned below:
- Eligible customers must have a good credit history and a credit score of more than 710.
- Should be existing customers of the bank. Certain banks lend to new customers as well.
- Must have a clean record of repaying debts.
- Existing customers are more likely to get pre-approved personal loans due to a strong relationship with the lenders.
Customers with no credit history and repayment record are also eligible as long as they have substantial savings in their account and a stable source of income.
How to Apply for Pre-approved Personal Loan?
The steps to apply for pre-approved personal loan are mentioned below:
Step 1: Check with your bank if a pre-approved loan offer is available for you. You can log in to your net banking account to check if you are eligible for a pre-approved loan.
Step 2: Submit a duly-filled loan application form which can be obtained from the lender's website, branch office, through SMS, or mobile app.
Step 3: Choose the required loan amount and suitable repayment tenure.
Step 4: The loan amount will be credited to your bank account after successful verification by the bank and your acceptance of the offer.
NBFCs may ask for documents like bank account statements, previous 3 month's salary slips, employee ID card, and KYC details like PAN and Aadhaar card.
What are the differences between Personal Loans and Pre-approved Personal Loans?
The difference between regular personal loans and pre-approved personal loans are given in the table below:
Regular Personal Loans | Pre-approved Personal Loans |
Approved within few hours | Approved within two to four days depending on the lender. |
Offers preferential interest rates to those with a strong credit history. | While the interest rates offered are subject to eligibility criteria. |
Minimum to no documentation | Requires submission of documents as per the bank norms. |
These loans are offered to those who meet the lender’s predefined criteria. | Need to meet eligibility criteria as per the lender. |
Why Did I Receive a Pre-approved Personal Loan SMS?
Pre-approved loans are a promotional exercise by banks to increase the sales of their loan products. There are several possible reasons why you may be chosen as an eligible customer:
- The bank might have checked your credit score and found you a good customer.
- The bank might have reviewed your credit history with them and noticed good bank balance and transaction rate.
- You may have taken a loan from the bank previously and made prompt and regular repayment.
- The bank might be monitoring your income and expenditure rates in comparison with your creditworthiness.
Key Points to Consider When Applying for a Pre-approved Personal Loan
Things to remember and consider before applying for pre-approved personal loan are mentioned below:
Limited Time Offer – A pre-approved personal loan is essentially an 'Invitation to Apply' (ITA) and is valid for a specific period. To take advantage of the offer, ensure you apply within the stipulated time frame.
Check Applicable Charges – Inquire about all associated fees, including processing fees, pre-payment charges, and pre-closure charges. This helps avoid unexpected costs.
Compare Offers – Always compare pre-approved personal loan offers from different lenders to secure the best deal.
Loan terms - To ensure that the lender conforms to the borrower’s repayment capacity, consider the loan terms, such as prepayment conditions, EMI amount, and loan tenure.
FAQs on Pre-Approved Personal Loan
- Does pre-approved personal loan offer a higher rate of interest than regular personal loan?
No, not always, as the rate of interest offered under pre-approved personal loan depends on several factors, such as repayment history, CIBIL score, monthly income, etc.
- How long does a pre-approved loan offer remain valid?
Unlike regular personal loans, pre-approved loan offers are usually valid only for a specific period.
- Will my credit score be affected if I do not accept a pre-approved loan?
No, your credit score will not be affected if you do not accept a pre-approved personal loan.
- Is a pre-approved personal loan guaranteed?
No, pre-approved personal loan is not guaranteed as these offers are ‘Invitations to Apply’. The final decision of approval depends on the lender and can be withdrawn in case of any adverse change in the applicant’s income or credit score.
- Does a pre-approved loan offer mean guaranteed loan approval?
Pre-approved loan offers do not mean that your loan application will be approved for certain. Your loan request, although "pre-approved", can be rejected by the lender if your credit score is low or if you do not meet an eligibility requirement during the verification process.
Devarthi Gattuwar is a Finance Content Writer who has experience writing about Credit Cards, Debit Cards, Tax, and other BFSI products. Other than that, she also writes about non-financial utility products like Aadhar Card, Voter ID, Government Certificates, etc. She has a special interest in Social Media Marketing and its nuances. She likes to read and learn new things. She's a mental health advocate, LGBTQIA+ ally and a dog mom.
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