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Pre-approved Personal Loan in India

Pre-approved Personal Loans

You must have seen many people around you getting pre-approved personal loans in India. And this thing must have made you ask this question about how to get pre-approved for a personal loan in India. But before knowing how to get a pre-approved personal loan, you must know what it is?

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Getting the documents ready and living up to the expectations of lenders can be tricky for some. If your documents are found incorrect or suspicious, the lender can so easily reject the loan application. But there’s one pre-approved personal loan that you can get without having to submit documents, relieving you from such a thankless job. This type of loan is granted to individuals having an existing relationship with the lender, be it through loans or credit cards. The past credit relationship with the lender can also help you fetch such deals. Zero documentation is because the lender already has your documents from the time you have initiated the relationship with it. Let’s delve more and see how a pre-approved personal loan can be useful to you.

What is a Pre-Approved Personal Loan and How can you apply for it?

As you can see from the name, it is like a personal loan but a pre-approved one. In a nutshell, lenders are giving you this personal loan without any application. Lenders give pre-approved personal loans to only those who have an existing personal loan, home loan or a credit repayment track with no spot of defaults. So you must remember that it is not available to everyone, but only to select customers. The most important thing about a pre-approved personal loan is that you don’t have to submit any documents to get the required amount.

If you want to know how can you get a pre-approved personal loan from any lender, you can use the following methods

  • By maintaining a Brilliant Credit Repayment Track
  • Existing Home Loan Borrowers with good payment behavior can also get this loan from the lender
  • By having a healthy income and reduced expenditure
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You must remember that you can not force a pre-approved loan. It depends on the lender whether it wants to give you a pre-approved personal loan or not. However, you can check if you have any pre-approved personal loan offers on your name by using any of the following methods.

  • By logging on to your Netbanking
  • By calling your lender’s customer care number to see if you are eligible for a pre-approved loan offer

If the lender thinks that you are eligible for a pre-approved personal loan offer, you would also get a notification in your net banking account or via an email/SMS.

How Much Pre-approved Personal Loan Can I Get?

It will mostly depend on your earnings, credit score, existing obligations, if any. Needless to say, people with a greater income will get more compared to those with limited earnings.

If there’s no debt obligation at the moment, you can get a higher loan amount. But if you’re still servicing any debt, the lender could reduce the loan amount to an extent that it becomes easy for you to repay. This will only lead the lender to believe that the loan will turn out to be a profitable deal for it.

A good credit score not only ensures pre-approved loan offers jam your mailbox or your mobile phones, but also plays a vital role in giving you an attractive deal. Credit scores need to be beyond 750 for you to make the most of attractive deals.

Now, What is That Attractive Deal That You Can Get?

The attractive deal could be zero processing fee, lower rates of interest and no prepayment charges. If you get a zero processing fee offer, it means the loan amount you apply and the net disbursement will be the same. Usually, what happens is that the net loan disbursement amount comes after the deduction of the application processing fee (inclusive of GST) from the loan amount you apply for.

Types of Pre-approved Personal Loan Offers

Pre-approved loans could come in the form of top-up loans, loan against credit cards, loan against salary accounts, etc.

How Does the Top-up Loan Work?

Top-up loans are an additional amount over the running loan amount. What happens then is that the lender adds the additional loan to the outstanding balance. Afterward, you need to pay the consolidated loan at a certain rate of interest. Now, you’ll be interested to know what will be the EMI, right? An example below will help you understand better.

Example – If your running loan of ₹5 lakh at 12% interest rate has completed 3 years of the original 5 year-tenure, you must have been paying an Equated Monthly Installment (EMI) of ₹11,122. As of now, you must have paid interest totaling to ₹1,36,674. The outstanding loan balance must be ₹2,36,273. Now, if you take a top-up of ₹1 lakh, the consolidated loan amount will be ₹3,36,273 (2,36,273 + 1,00,000).

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You can now choose to pay over 2 to 5 years. Banks may ask you to go for the maximum tenure. They do so to collect more interest from you. But you’ll be served well to get it to 2-3 years. This will help keep both EMI and interest affordable for you. In case you choose 3 years, the fresh EMI at 12% interest rate will be ₹11,184. The interest would amount to ₹65,902 in these 3 years.

Loan Against Credit Credit Card – What This Sort of Lending All About?

In the beginning, it is said that a pre-approved loan is also given based on credit cards. But it will depend on how efficiently you have paid the credit card bills. A strong repayment track is what lenders would like to see before giving you the loan against credit card. Take a look at the table below showing the offers of different lenders.

LendersInterest Rate (In per annum)Quantum of Loan (In ₹)Tenure (In Years)Turnaround Time
State Bank of India (SBI)Around 19%-20%Minimum Loan - 5,000

Maximum Loan - Upto 75% of the cash limit available
As applicableMoney gets credited to your account via NEFT within 48 working hours
HDFC BankCustomizedWithin the credit limit of the credit card1-4 yearsThe amount gets credited to your account in a few seconds
ICICI BankCustomizedUpto 10 LakhUpto 5 YearsThe money comes to the account in 3-4 working days via NEFT. For those wanting credit transfer via demand draft, it will take 11 working days
Axis Bank11.40%-22.20%It will depend on your income, credit score and repayment potentialMultiple tenure options availableInstant credit to your Axis Bank Savings Account
Kotak Mahindra BankCustomizedUpto 5,00,0006-48 MonthsInstant credit to your bank account

How to Get a Pre-approved Personal Loan Based on Salary Account Relationship?

If your salary account relationship with the lender has been smooth and fruitful, don’t be surprised to get pre-approved personal loan offers. In the case of salary accounts, lenders will have a close look at your monthly remuneration. This will give lenders a fair clue of your repayment capability. Plus, other transactions will also help lenders set the loan amount for you

What is the Eligibility Criteria for Pre-approved Personal Loan?

This is a pretty important factor as this will determine if you are eligible for a pre-approved personal loan or not. There are a few factors that determine your eligibility, you can take a look at them below.

  1. The individual must have a decent credit score, usually above 700 with a solid repayment track.
  2. Lenders check your existing bank balance before deciding your eligibility for a pre-approved personal loan.
  3. The monthly income of an applicant
  4. It is also important to have a substantial savings history in your account.
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Other than these, you can also check your eligibility by logging into your Netbanking account. You will see there if you are eligible for this or not. You must also remember that a pre-approved personal loan is usually for a limited period, and you have to apply within that time only.

What are the benefits of a Pre-approved Personal Loan in India?

Now that you have some basic information about the pre-approved personal loan and the ways to get it, you must know the benefits that it has in store for you. You can check them below.

No Documentation

The first and foremost benefit of a pre-approved personal loan is that you don’t need any documents. Unlike a usual personal loan where you need to submit a few documents authenticating your identity, address and income, you don’t need to submit anything for a pre-approved personal loan. As lenders offer you this, you just have to accept the offer and the loan amount will be in your account instantly.

Faster Disbursal

Lenders take the minimum possible time in disbursing the loan amount once you opt for the pre-approved personal loan. Why? Because lenders have already checked your creditworthiness, hence they are able to disburse the loan quickly on to your account.

No Collateral Required

Same as a personal loan, you don’t need to pledge any kind of security to access the pre-approved personal loan. The lender will give you the funds basis your credit history and repayment behavior.

Lower Interest Rate

With the help of a pre-approved personal loan, you will get the amount at a lower interest rate than a personal loan from any lender. With this, you will be able to easily repay the loan amount within the fixed tenure which usually ranges from 12 months to a maximum of 60 months.

End-Use Flexibility

On getting a pre-approved personal loan in your account, you are completely free to use this amount for any need of yours. It can be for paying your credit card dues, buying your loved gadget, renovating your house, etc.

Special Offers and Discounts

Since this pre-approved personal loan is offered by the bank, you can get some special offers such as processing fee waiver. Unlike a personal loan, you have more negotiation power than usual as the lender is reaching out from itself to lend the amount.

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  • Personal Loan Interest Rates July 2020
    Fullerton India14.00% - 33.00%
    HDFC Bank10.75% - 21.45%
    ICICI Bank10.99% - 18.49%
    IndusInd Bank11.25%
    Kotak Bank10.99% - 20.99%
    RBL17.50% - 24.00%
    Standard Chartered Bank11.50% - 18.00%
    Tata Capital10.99% - 18.00%