Everything you Need to Know about a Pre-?Approved Personal Loan

Posted by Anamika Verma on May 5th, 2016

You might often get calls or text message intimations letting you know that you are eligible for a pre-approved personal loan. A lending institution usually extends these offers to those who are capable of repayment. These loans are valid for a limited time period and are offered to you if you have a neat repayment history. Those who’ve never taken a loan also get such offers as their financial track record is clean.

There are two types of pre-approved loans—secured and unsecured. The unsecured loans comprise of credit cards and personal loans that offer cash without any collateral. A secured loan, like a home loan or a car loan, on the other hand, offers loan against collateral.

Do You Need a Pre-­Approved Loan at All?

Well, this depends on individual perspective. You must first ask yourself if you need a loan at all. Just because you’re getting a great loan deal doesn’t mean you have to jump in immediately. Also remember that although the deal might sound lucrative, you will have to bear the charges mentioned in the loan policy.

When Does a Pre-­Approved Loan Come Handy?

Imagine yourself in a situation where you have to buy an expensive gadget or a holiday package because the deal is really good. Such deals are usually up for grabs with hordes of people like yourself trying to make the purchase immediately. If you loan isn’t pre approved in such a case, the time taken for application approval and release of funds might eventually result in you missing out on the deal.

In such situations, a pre-approved loan comes handy as it take lesser time to get sanctioned.

The Loan Amount and Interest

As mentioned earlier, a pre-approved loan offer originates if your financial track record is stellar. It’s usually the lender who will decide on the loan amount by going through your past debts, repayments, and credit card expenses. Although your records might assist you in negotiating the loan amount with the lender, it’s you who has to decide on the amount before they tell you what’s best.

Benefits of a Pre-­Approved Personal Loan

First of all, you should pat your own back because it’s your financial record that has landed you the offer. Here’s how you’d benefit from the offer, if you do take the bait:

Stellar financial record equals loan offer. This is how you should understand the logic. The lender who revealed the deal also sees it the same way. But your record is spotted by other lenders as well who’ll compete to make you their customer. You can use their offers as leverage and bargain for the best deal.

Personal and credit card loans that you sign up for in the time of emergencies also take a hit from pre-approved loans as they usually have high-interest rates.

An instant personal loan can help you get better financing options to buy cars and properties as your requirements. Moreover, you’ll also be sure of your budget and won’t risk losing any of your purchases.

Yes, it’s an offer from the bank tailored for you. But that doesn’t mean they won’t be scrutinizing your personal loan documents. While they do their job of evaluating your candidacy, do yours by comparing policies, negotiating terms, and seeking assistance from financial experts.

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Anamika Verma

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Anamika Verma
Joined: May 5th, 2016
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