All of us know quite a lot about loans and the terms and conditions associated with various types of loans. Also, we all know that application is needed in order to get approved for the required loan. We get confused when we get a text or email saying that “you are eligible for a pre-approved loan”. Here all the details that you need to know to drag yourself out from the confusion zone. You can also check to apply for a personal loan online on https://www.sc.com/in/loans/personal-loans/.
What is a personal loan?
It is a type of loan that can be availed by any self-employed or salaried person without any collateral. It is an unsecured loan. All he or she needs to have a good credit score from any NBFC’s, bank or Fintech lenders.
Pre-approved personal loans
When any potential borrower’s creditworthiness becomes eligible for a loan then the lenders offer him a preapproved personal loan. Basically, it implies that you have a good credit score and in this period if you apply for a loan it will get approved easily and in some cases, the approval can happen within a few minutes.
Why are you are eligible for a preapproved loan?
There are some factors that make you eligible to avail of the pre-approved loans. Here you get a list of them
- If you have a stable source of income, it defines that you can pay back the loan in time.
- If you have any EMIs and paid them time to time.
- If you have an outstanding credit score.
- If your account balance is maintained properly
- If you repay your credit card bills on time
These factors reflect a good image of yours and give them the assurance that you will pay back the loan on time.
What are the documents that are needed to apply for a pre-approved loan?
If you are eligible for a pre-approved loan then it is obvious that your creditworthiness has already been checked. So, there is no need for the initial screening that normal borrower has to go through. But, there are some required documents that you need to show to the lender in order to avail of the pre-approved loan. You will need-
- Last six months’ bank statements (can differ)
- PAN card
- Residential proof, such as passport, Adhaar card or driving license
- Salary slips of last three months
Why you should go for pre-approved lean?
There are several benefits of pre-approved loans that you can avail, just like
Less processing time: In the case of the pre-approved loans, the lender already validated your credit score, so you can skip the initial processing. So the processing time decreases as there is no need to check your credit score.
Inexpensive rate of interest: When you are getting a pre-approved loan that suggests you have a good credit score and as a benefit of this, the interest rate gets lower than any loan you can apply.
Better terms: Since you have a good credit score and a pre-approved customer, as per your need you can bargain the terms and conditions, such as EMI tenure and etc.
Why you should not go for a pre-approved loan?
Borrowing money from others is the last option we choose to survive. We only apply for loans when we need it the most. Though there are several benefits of a pre-approved loan, the main drawback of it is that it is a limited period offer. There is a possibility that you do not require any loan or financial assistance at the particular time when the loan is offered to you and when you need it, the offer can be gone.
So if you get any notification that you are eligible for a preapproved loan but facing a dilemma about availing the loan or not and wanting to get some guidance on that. Now you know all the details of a pre-approved loan, the process, the benefits all.