What are the eligibility criteria and key benefits of pre-approved Personal Loans?

Pre-approved Personal Loans are one of the quickest ways to get funds. This kind of Personal Loan is already approved by the lender beforehand, and the loan amount and other details depend on various factors like the borrower's credit profile, their mutual relationship, the borrower's repayment history, etc.

So, if you are thinking of considering this credit option, you may want to know the eligibility criteria for a pre-approved Personal Loan and what benefits you will be getting from it.

Eligibility criteria for a pre-approved Personal Loan

There are some specific parameters you need to meet to be eligible for a pre-approved loan. These are.

1. Age criteria: The applicant should be between 21 to 58 years of age to apply for this Personal Loan.
2. Income proof: For salaried individuals, the person should be employed for at least six months. For self-employed people, their business should be in operation for at least two years. In both cases, the applicant has to produce the bank statement for the last six months.
3. Other documents: The applicant's KYC details; identity and address proof are also required.

Key benefits of pre-approved Personal Loan

Pre-approved Personal Loans have some exciting characteristics which make them the perfect choice for anyone.

A. Easy application and minimal documentation

With digitisation, it has become easier to apply for loans online. You just need to select a lender of your choice and visit the respective online portal. From there, you will get all the required information regarding the credit. Check the lender's eligibility criteria and ensure you meet all of them. Then, fill up the application form with the necessary details.

The documents required for the loan application are also straightforward and minimal. You will get the details from the website. Usually, the lenders ask for address proof, identity proof, income status, pay slips or bank statements etc., for making a loan application. Since you will be doing the whole process online, you can just upload the documents along with the application form. And your lender will verify and approve your application online.

In addition to websites, you can download the instant loan app of a reliable lending institution and apply for an instant loan.

B. Fast processing and quick disbursal of funds

The processing time is significantly less after the application is completed through an instant loan app. Since the loan is already pre-approved, you will get the approval instantly. Once you receive the approval, the funds will be disbursed and credited to your registered account.

C. No collaterals required

Another plus point of the pre-approved Personal Loan is that the applicant does not need any collateral to get the loan approved. This kind of loan is unsecured, so it does not require any security to be pledged. If you can meet the eligibility criteria of your lenders, you can get a fast approval.

D. Flexible tenure of the loan

One of the notable advantages of the pre-approved financing option is the repayment tenure. One of the issues many people face after getting a loan is they fail to repay it on time. When you fail to pay back the loan on time, it affects your credit score severely.

In the case of a pre-approved Personal Loan, you can talk with the lender and fix a tenure suitable for you. The tenure generally varies from 12 to 60 months, and you can choose one that fits your needs. Usually, a pre-approved Personal Loan allows you to choose a tenure according to your expenses and manage everything carefully.

E. No limitation on the use

Pre-approved Personal Loans have no end-use restrictions. It means you can use it for any purpose, from your personal needs to meeting any urgent medical expenses, etc. Also, the lender cannot ask the applicant where the funds will be used, as the lender has no such authority in this case.

These are some of the notable advantages of taking a pre-approved Personal Loan; however, before proceeding, you should keep a few pointers in mind to avoid making a wrong financial decision.

Top 3 things to check before applying for a pre-approved Personal Loan

Here are a few points you must consider before taking a pre-approved Personal Loan.

1. Interest rate: The first point to review here is the interest rate applicable to the loan. Since it will determine the final repayment amount, you need to find an interest rate that keeps the debt nominal and helps with repayment.
2. Additional charges: The next point to review is the additional charges applicable to the loan. This will include processing fees, late payment charges, etc. Together, these can increase your total cost of borrowing, so calculate their effects and then decide.
3. Additional terms: Apart from the usual loan terms, if any other terms are associated with the credit, you must also check them. Otherwise, it can create problems for you later.

Conclusion

The lenders may propose pre-approved Personal Loans, but this does not guarantee the approval of your loan. If any discrepancies are found in your application and the documents, they will be rejected. Also, before accepting the proposal, carefully review all the details and terms to get the best loan offer.