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.
|Loan Amount||Up to ₹20 Lakh|
|Interest Rate||9.9% to 45% p.a.|
|Foreclosure Fee||0-5% of the principal outstanding|
|Tenure||Up to 60-72 months|
Here are some of the benefits of pre-approved personal loans:
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.
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.
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.
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.
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.
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:
Eligibility criteria for pre approved loans could vary according to the lender. Here are some general criteria:
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:
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.
Rate of Interest (P.a)
Loan Tenure (Months)
|Bank or NBFC||Interest Rates (p.a)|
|Navi||9.9% – 45% p.a.|
|Punjab National Bank (PNB)||7.90% – 14.50%|
|State Bank of India (SBI)||9.60% – 13.85%|
|HDFC Bank||10.25% – 21%|
|ICICI Bank||10.25% onwards|
|Axis Bank||10.25% onwards|
|IDFC First Bank||10.49% – 23%|
|Kotak Mahindra Bank||10.25% onwards|
|Tata Capital||10.99% onwards|
|IndusInd Bank||11.00% onwards|
|IDFC First Bank||10.49% – 23%|
|Bajaj Finserv||13.00% onwards|
*This table is used for educational purposes only
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!
No. Personal loans, pre-approved or not, typically do not qualify for any tax deduction benefits since they are not considered a part of the borrower’s income while filing tax returns.
Yes, repaying a personal loan in full on time could definitely improve a borrower’s credit score in the long term. However, missing loan EMI payments could be equally detrimental to an individual’s credit score making it difficult for him/her to get a loan at good repayment terms in the future.
In case your submitted documents cannot be verified successfully for any reason, your pre-approved loan application might be denied. However, if you apply for a personal loan from Navi, your digital verification happens instantly and since there is no hassle of uploading any documents, the loan approval would not be denied after it has been digitally approved by Navi’s technology-driven application.
No, a pre-approval can never guarantee a loan as incomplete verification of the documents provided might cancel the application.
A pre-approved loan is a type of personal loan. Therefore, it is a multi-purpose loan that can be utilised for any purpose whatsoever. Even a personal loan from Navi can be used for any purpose.
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