A pre approved personal loan can be a great solution to help you cover unexpected expenses, fund a large purchase, or consolidate high-interest debt. But before you start shopping for a personal loan in India, it’s important to understand the pre-approval process. Pre-approval is when a lender reviews your creditworthiness and financial situation to determine the maximum amount you can borrow and the terms of the loan. In this article, we’ll discuss the steps you can take to get pre-approved for a personal loan.
- Check your credit score
Your credit score is a critical factor that lenders consider when evaluating your loan application. It’s a three-digit number that represents your creditworthiness based on your credit history, including your payment history, credit utilization, and length of credit history. In India, credit scores range from 300 to 900, with higher scores indicating better creditworthiness.
To improve your chances of getting pre-approved for a personal loan, you should check your credit score and credit report first. You can get your credit report for free from any of the credit bureaus in India, including CIBIL, Experian, Equifax, and CRIF Highmark. If your credit score is low, take steps to improve it by paying your bills on time, reducing your credit card balances, and correcting any errors on your credit report.
- Research lenders and loan options
There are many lenders in India that offer personal loans, including banks, NBFCs, and online lenders. Each lender has its own eligibility criteria, interest rates, and fees, so it’s important to shop around and compare your options. You can use online comparison websites to see what different lenders are offering, or you can visit individual lender websites to get more information.
When researching lenders and loan options, pay attention to the following factors:
- Interest rates: This is the amount of interest you’ll pay on your loan. Lower interest rates mean lower overall costs.
- Fees: Some lenders charge processing fees, prepayment penalties, or other fees that can add to the cost of your loan.
- Loan amounts: This is the maximum amount you can borrow. Make sure the lender offers enough to cover your needs.
- Repayment terms: This is the length of time you have to repay the loan. Shorter repayment terms mean higher monthly payments, but lower overall costs.
- Eligibility criteria: This includes factors like your age, income, employment status, and credit score. Make sure you meet the lender’s eligibility criteria before applying.
- Gather your documents and information
To get pre-approved for a personal loan, you’ll need to provide certain documents and information to the lender. This may include:
- Identity proof: This can be a PAN card, passport, driving license, or Aadhaar card.
- Address proof: This can be a utility bill, rental agreement, or Aadhaar card.
- Income proof: This can be your salary slips, bank statements, or income tax returns.
- Employment proof: This can be your offer letter, appointment letter, or employment contract.
- Other documents: This can include your credit report, loan application form, and photographs.
Make sure you have all the necessary documents and information ready before applying for a pre-approved personal loan.
- Apply for pre-approval
Once you’ve done your research and gathered your documents, it’s time to apply for pre-approval. You can do this online or in-person, depending on the lender’s process. To apply for pre-approval, you’ll need to fill out a loan application form and provide the necessary documents and information.
The lender will then review your application and documents to determine your creditworthiness and financial situation. If you meet the lender’s eligibility criteria and have a good credit score, you’ll likely be pre-approved for a Personal Loan
FAQs on Pre Approved Personal Loan:
- Is it good to take pre-approved personal loan?
Answer: Personal Loans are usually costly and should be taken only in case of emergency.
- Does pre approval mean you will get the loan?
Answer: Pre-Approved personal loan offers are subject to the fulfilment of condition mentioned in the Pre-Approval Offer Letter of the Loan.
- Who is eligible for pre-approved loan?
Answer: Customers with good credit history are generally offered pre-approved loan by the Banks and NBFCs.
- What is pre-approved Personal Loan?
Answer: Pre-Approved loan is designed by the Banks and NBFCs for selected customers based on their good credit history
- How much time does it take for pre-approved loan approval and disbursal?
Answer: Pre-Approved personal loans can be disbursed normally within one day to one week time depending upon the fulfilment of the conditions specified in the pre-approval loan offer letter.
- What is the benefit of pre-approved personal loans?
Answer: The major benefit of the pre approved personal loan is that it is hassle free and involves minimum documentation and is disbursed very quickly, some times within few minutes.
- How long is personal loan pre-approval valid?
Answer: Pre-Approved personal loan offer is valid for a limited period, which is invariably mentioned in the pre-approval offer letter.
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