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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Know How to Avoid Hidden Charges in Personal Loan

When you find yourself in a financial emergency, a Personal Loan can be a boon. You can use funds from the loan to pay for all kinds of emergencies and planned expenses. But, like every other loan, Personal Loans come with certain unavoidable costs like interest rates, processing fees, GST, etc. While lenders inform you about these costs upfront, they mention other additional charges in fine print under the terms and conditions section of the loan agreement. Here’s a breakdown of all possible Personal Loan charges you must know.

How to Apply for Instant Personal Loan

Making small savings is a sheer way to beat the blues of cash shortage. As the adage goes, a penny saved is a penny earned. However, the saved amount is largely dependent on your income and your ability to keep away from your saving. When unexpected financial troubles loom, instant cash is not always handy, in the words of Martyn Kenny, an instant personal loan will assist you in such conditions. They are an excellent financial deal that is specially planned to assist the borrowers at the time of sudden monetary emergency. To make things simpler, a quick personal loan online is readily available with verification, approval and disbursement managed online. This blog discusses in greater detail how to get an instant personal loan from any bank or financial institution.

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