How to Apply for a Pre Approved Personal Loan?

Pre Approved Personal Loan

Pre-approved loans are instant personal loans that are offered by banks and non-banking finance companies (NBFC) to select customers. Lenders select these customers based on their credit history, business relationship with the lender and repayment capacity among other factors.

Read on as we discuss what a pre-approved personal loan is, its benefits, and how lenders ascertain eligibility for such a loan among other critical pointers.

Pre-Approved Personal Loan Details

Features and Benefits of a Pre-Approved Personal Loan

Here are some of the benefits of pre-approved personal loans:

1. Instant Disbursal

If you have a pre-approved loan offer, it means your lender has already approved a predefined loan amount for you after considering your credit history, income, etc. All you need to do is select your preferred loan amount within the pre-approved loan offer threshold and apply. The loan amount would typically be credited to your bank account in a few minutes. 

2. Zero Documents Required

You can get a pre-approved loan without having to submit any documents. This is because the lender has already checked your credit profile and customer history at the backend before offering you a pre-approved personal loan. 

3. Repayment Flexibility

You also have the flexibility to choose the repayment tenure of a pre-approved loan. Personal loans usually come with a maximum tenure of five years; however, some lenders offer a longer tenure of up to seven years as well. You can select the repayment tenure as per your convenience.

4. No Collateral Required

Personal loans, pre-approved or not, are unsecured loans. Meaning, you don’t need to pledge any collateral to get a personal loan, unlike secured loans like a gold loan (where your household gold could be the collateral) or a car loan (where your car is the collateral). This, coupled with no restrictions over end-usage of the loan funds, make personal loans one of the most preferred loan options in the country. 

5. Competitive Interest Rates

Lack of collateral requirement usually results in lenders charging slightly higher interest rates for unsecured loans like personal loans than secured loans. However, lenders still try to keep the minimum interest rates for personal loans as low as possible for competitive advantage, especially for pre-approved customers and those with high credit scores. 

Also Read

Personal Loan Disbursal Process

Unsecured Loan – Types, Benefits, Interest Rate & Eligibility

How to Avail a Pre Approved Loan?

Documents Required for Pre Approved Loan

While you’re unlikely to submit any additional documents while applying for a pre-approved personal loan, you might want to keep these handy subject to your chosen lender’s terms and conditions:

1. PAN card
2. Aadhaar card

Eligibility Criteria for Pre Approved Loan

Eligibility criteria for pre approved loans could vary according to the lender. Here are some general criteria:  

1. You must be a citizen of India
2. You should have a good loan repayment history
3. Your income must be above your lender’s minimum income requirement for a personal loan
4. You must be between the age of 21 to 65 years
5. You must be a salaried individual or self-employed
6. Some lenders might offer pre-approved loan offers only to their existing customers

Calculate your Pre-approved Personal Loan EMI

Calculating your EMIs beforehand could help you ascertain the affordability of your loan repayments and ideal loan tenure. 

You can calculate your EMI manually with a simple formula:

• EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

Here, P is the principal amount, R is the rate of interest and N is the number of months or tenure.

However, manually calculating the EMI could be a cumbersome process. Thus, it would be far more convenient to use an online personal loan EMI calculator – like the one below – to get accurate results in just a few seconds.

Calculate your Pre Approved Personal Loan

Pre Approved Loan Interest Rates of Various Banks and NBFCs

*This table is used for educational purposes only

Things to Consider Before Applying for Pre Approved

• Consider asking the bank or the NBFC about the processing fee. 
• Pre-approved personal loans are valid only for a certain period of time as they are an Invitation to Apply (ITA). You must apply within that time period to avail a pre-approved personal loan.
• Compare the interest rates and processing fees of other personal loans. 

Final Word

A pre-approved personal loan is a collateral-free loan option that can help secure funds at competitive interest rates from your lender. It usually comes with instant disbursal and zero documentation making it an ideal option during a financial emergency.

If you have a good credit score, you can get an instant personal loan within minutes. However, pre-approved loan offers could be valid only for a certain period of time. 

Navi offers instant cash loans of up to ₹20 lahks starting at just 9.9% p.a. with 0 processing fee or foreclosure charges. Just download the Navi app to get a loan in a few minutes! 

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