Complete Guide On Pre-Approved Personal Loans
18 Jul 2022
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If you need money urgently, you may consider taking out a collateral-free and unsecured Personal Loan. You can choose the Personal Loan amount and wait for the lender to confirm the eligibility, while the final approval process may take time. However, sometimes lenders notify you that you are eligible for a Personal Loan, even if you don’t apply for one. Such loans are known as Pre-approved Personal Loans. Read on to learn more about these loans.
Pre-approved Personal Loans - An Overview
Pre-approved Personal Loans are instant Personal Loans that lenders offer their existing customers based on their credit worthiness. When you repay your debts on time and have a good income, the lender offers a set amount, which you can borrow as a Personal Loan. Banks also provide Pre-approved Micro Personal Loans of up to Rs 50,000 to finance offline and online purchases. When you apply for a Pre-approved Personal Loan, the lender credits the loan amount to your Savings Account within minutes.
Pre-approved Personal Loans are different from your regular Personal Loans. In the case of the latter, you can decide the required loan amount, which the lender approves based on your eligibility. However, for Pre-approved PL, the loan amount is pre-set.
Eligibility For A Pre-Approved Personal Loan
An excellent credit score and stable monthly income are the prerequisites to get a Personal Loan. Plus, if you are a long-standing customer of the bank with a sound financial record, you may be eligible for Pre-approved Loan offers. Maintaining sufficient account balances also enhances your chance of securing a pre-approved loan.
You can check Pre-approved Loan eligibility criteria on your mobile and internet banking platforms. You can also contact your relationship manager to assess your eligibility.
How To Increase Your Chances of Obtaining an Instant Pre-Approved Personal Loan
- Maintain a high credit score: Your credit score reflects your debt repayment capabilities. Maintaining a consistently high credit score of 701+ can help you qualify for the loan.
- Keep a low debt-to-income ratio: Your debt-to-income ratio is the ratio of your gross debt to your gross income. Ideally, your EMIs should be less than 1/3rd of your income to be considered for the loan.
- Maintain a working relationship with your bank: Your existing relationship with your bank, coupled with your good financial management record, increases your loan acquiring abilities.
Advantages Of Pre-Approved Personal Loans
- Shorter processing time: Banks disburse pre-approved Personal loans in the borrower’s accounts within a few minutes to a couple of hours.
- Flexible repayment terms: Lenders see you as a retainable customer; therefore, they are more likely to offer flexible repayment terms.
- Attractive interest rates: Pre-approved Personal Loans come with competitive interest rates leading to pocket-friendly EMIs.
- Minimal paperwork: As an existing bank customer, the lender already has your details. This reduces the paperwork required to obtain a loan, and you may only need to submit scanned copies of your income proof documents.
- Multipurpose loan amount: There are no end-use restrictions once the lender disburses the loan amount. You can fund medical expenses, vacations, weddings, etc.
FAQs
What documents should I submit while applying for an instant Pre-approved Loan?
Since Pre-approved Personal Loans are offered to existing bank customers, documents are not required. The lender has your KYC information in their records. However, in some cases, the lender may ask for income proof, KYC proof (Aadhaar, PAN, Voter ID) and a cancelled cheque.
Can I increase the Pre-approved Personal Loan amount?
You can apply for Pre-approved Loans online, but the loan amount is pre-set. However, you can speak to your lender and enhance the approval limit if you want a higher loan amount.
Can my instant Pre-approved Personal Loan get rejected?
Yes. A Pre-approved Loan does not indicate the bank’s guarantee to sanction your loan. The lender can reject your loan if you furnish incorrect information or if the lender finds errors during the verification process.
What is the validity of the Pre-approved loan offer?
The validity differs from person to person. Lenders offer this loan for a specific period, after which the offer expires.
Apply for Personal Loans with Bank of Baroda
Pre-approved Loans are helpful when you need funds urgently. If eligible, the lenders will disburse the loan amount within minutes. With Bank of Baroda, you can enjoy instant Pre-approved Personal Loans of up to Rs 5 Lakh at competitive interest rates based on your eligibility. Other features include zero processing fees and instant disbursal of funds. The bank also offers Pre-approved Micro Personal Loans of up to Rs 50,000, which you can obtain instantly to pay for online expenses and offline purchases. Call our toll-free number 1800 5700 or head to your nearest Bank of Baroda branch for more details.
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The contents of this article/infographic/picture/video are meant solely for information purposes and do not necessarily reflect the views of Bank of Baroda. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Bank of Baroda and/ or its Affiliates and its subsidiaries make no representation as to the accuracy; completeness or reliability of any information contained herein or otherwise provided and hereby disclaim any liability with regard to the same. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Bank of Baroda or its affiliates to any licensing or registration requirements. Bank of Baroda shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
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