As per stats revealed by the Reserve Bank of India, the personal loan sector witnessed a year-on-year growth of 11.2% from the previous year. Funding under this lending segment thus stood at approximately Rs.25 trillion at the end of July 2020.
This exponential growth is attributed to several features that a personal loan accompanies. Moreover, most financial institutions offer this loan after conducting a thorough eligibility criteria check. Thus a pre-approved loan offer proves to be borrower-friendly that reduces the hassles of a loan application process, providing easy financing to individuals.
Therefore, prospective individuals should first learn about what is a pre-approved loan in detail to leverage the benefits of this facility.
Pre-approved loans – An overview
Typically, prospective borrowers approach a lender to apply for a loan. However, in case of a pre-approved loan, a borrower with high eligibility is relieved from undergoing detailed eligibility and documentation check.
Primarily, lenders extend this offer to individuals with a clear credit history and in most of the cases to their existing customers who carry a reliable repayment history. These offers are available on a range of secured and unsecured credit products, including a personal loan.
Besides knowing about what is pre-approved loan, one must also learn about its several benefits to ensure maximum utilization.
Advantages of pre-approved personal credits
Following are the perks of opting for a pre-approved personal loan.
- Prompt loan processing
Lenders extend a pre-approved personal loan after assessing borrowers’ eligibility requirements like their credit profiles, credit scores, and repayment of previous loans. It thus expedites the loan approval and disbursal process. It also means that borrowers do not need to spend a lot of time learning about how personal loan applications are processed.
- Lower interest rate
Another advantage of pre-approved personal advances is that qualified borrowers can negotiate for competitive interest rates. It makes one eligible to negotiate for a reduced interest rate than initially offered. Eventually, it lowers the burden of monthly instalments to a great extent, and the overall loan liability. Nevertheless, to make things easier, one also needs to know how to calculate personal loan EMIs.
- No limitation on end-use restrictions
Just like a conventional personal loan, pre-approved personal credits also come with no restrictions to end-use. Individuals can thus use the funds for various purposes; for instance, debt consolidation, paying expenses for emergency medical bills, funding higher studies, and many more.
All they need to do is call at their selected lender’s personal loan customer care no to accept the offer and follow the instructions to complete the application process.
- Systematic management of finances
Pre-approved loan offers also help in choosing the best personal loan with convenient terms of service, thus allowing you to handle your finances better. Further, since you will be aware of the loan amount beforehand, you will know how much you can spend for a particular purpose and eventually plan out ways to efficiently repay the loan.
Select financial institutions like Bajaj Finserv also provide pre-approved offers that make the loan application process straightforward and less time-consuming. Besides personal loans, these offers are also available for business loans, credit cards, etc. All you need to do is enter your name and mobile number to check your pre-approved offer.
- Exposure to several choices
Since lenders extend a pre-approved personal loan with all pre-set terms, individuals get a chance to compare different lenders before settling for one. It will allow them to compare the interest rate and other terms of services as well before making an informed decision.
They can further compare the repayment liabilities conveniently with the use of a personal loan EMI calculator available online.
Adopting such measures besides knowing about what is pre-approved loan, individuals can plan their loan repayments suitably. They can also estimate the overall cost of borrowing, interest payable, number of EMIs and several other details instantly with customised tools like an EMI calculator.