Q: What are pre-approved loans? How do they work? – Sanjay
A: Based on your good credit score and transaction record, your bank may offer you a pre-approved loan facility. Pre-approved loan offers could be related to a personal loan, car loan, etc. The significant benefits of a pre-approved loan include less documentation, (possibly) lower interest rates, quicker processing, among other favourable borrowing terms.
You can check whether you’re eligible for a pre-approved loan by logging in to your online banking account or reaching out to your bank through phone banking. Banks also update their customers about such offers on their registered mobile numbers and email accounts.
However, before applying for a pre-approved loan, check whether you actually need it or not. It’s not recommended to avail the loan facility simply because you’re eligible for it. Also, compare the charges linked to your pre-approved loan with similar facilities offered by other banks before taking a decision.
That being said, a pre-approved loan can save you time, give you instant access to the loan amount and save you from lengthy application procedures. If you’re on the lookout for a loan, a pre-approved facility can be beneficial.
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