In the case of banks, a pre-approved personal loan is a personal loan that is given to customers who meet specific criteria, such as their relationship with the bank, the amount they have in their savings or checking account, a fixed deposit, how much they use their credit card, etc.
In the case of non-banking financial companies, a pre-approved personal loan is a top-up instant salary loan given to existing customers with a history of paying on time and a good credit score. It doesn’t need any collateral, and the interest rate on a personal loan depends on the borrower’s history.
A personal loan can be taken out for any legal reason, and it’s a great way to cover immediate individual costs like those caused by a sudden job loss, a medical emergency, or an unplanned event.
You could get pre approved offers or a top-up loan for several reasons. Here are a few of them:
- Good history of making payments—you may have paid your EMIs on time, not been late, or missed a payment.
- Your monthly income may have gone up recently, or you may have paid off enough of your current loan to qualify for more credit.
- Based on the most recent credit report and credit score, responsible money management.
Personal loans that have already been approved
You only need to feed in your name, mobile number, and the OTP shared with you to check your pre approved personal loan offer. Here are the requirements for getting an instant salary loan:
- You must be a residing Indian citizen.
- You must work for a private or a public limited company or an MNC.
- You must be between 21 & 67 years.
- You should make at least 22,000 rupees monthly.
- Documents for a personal loan already approved. However, in some cases, you might be asked for some minimal documentation.
For an instant salary loan in India, you need the following.
- Fill out an application for a personal loan and include a recent photo.
- Proof of who you are, like a copy of your passport, voter ID, Aadhaar card, driving license, etc.
- Proof of address, like a ration card, a lease, a phone bill, etc.
- Proof of age, like a PAN card, a birth certificate, or the like
- A bank statement or chequebook shows the last six months of pay or the previous three months of pay stubs.
- Form 16: A check for the fee for processing
- Income tax returns
How can you make the pre-approved loan offer more likely to go through?
The primary or general criteria for approving any loan application is the applicant’s credit score/CIBIL score. A person should look for ways to improve their credit score. Since a person’s credit score shows their credit history, anyone who wants to get a loan should work to improve their credit score. There are a few ways to improve your credit score. If you have a credit card and still owe money, pay it off on time and don’t wait. You can also improve your credit score by getting another credit card, whether you need it or not. You can improve your CIBIL score if you can increase the credit limit on your credit card, which shows that you are a more reliable borrower. You should always know your credit score. Getting different kinds of credit cards is another way to improve your credit score. If you already have a loan, make sure you pay the EMIs (equal monthly instalments) on time.
Summary
When a person applies for a loan, the first thing a lending company looks at is their CIBIL or credit score. This factor is still the most important when deciding whether to give the loan. However, there are times when the lending bank or financial institution looks at other factors. Simply put, the chances of getting a loan go up if the person has a good credit score. When it comes to the idea of a pre-approved personal loan, lenders come up with it to help people with good credit. Since a good credit score shows that a person is more likely to be able to pay back a loan, lending companies (banks and NBFCs) prefer to work with them. This ensures the loaned money is paid back on time and at the agreed-upon interest rate. Even though lenders use pre-approved offers of loans as a way to market their services and convince potential borrowers to borrow from them, the lender makes the final decision to approve a loan. Even a pre-approved loan could be turned down if the borrower doesn’t meet the lending company’s or bank’s criteria. So, people shouldn’t think they will get the loan just because the lender gives them pre-approved offers.