Eligible for a pre-approved loan offer? Check rules here

During the holiday season, we need extra money to buy items that have been on our shopping list for months. We also see a lot of discounts and offers on consumer goods, and people want to buy almost everything on their wish list.

Banks provide attractive financial product discounts to qualified customers. A pre-approved personal loan is one of the products available to customers who have a good repayment history. This loan is a type of unsecured borrowing. You may use the pre-approved personal loan for any purpose you deem appropriate. Let's see when a person might receive a pre-approved personal loan offer from a bank and whether or not these offers should be accepted.

Eligibility

People who qualify for pre-approved loan offers usually have a strong financial history with their current bank. To consistently maintain a higher credit score over time is one of the essential requirements. Your strategy can be strengthened further if you have a history of consistent and timely repayment of current and previous loans. Your income level is crucial because the lender may assess it before extending a pre-approved loan in order to determine your ability to repay it.

In your favour?

The advantages can be many. When you have a pre-approved personal loan offer, you don't need to wait for a loan approval. Your credit history is already known to the lender, who also has access to your KYC records. Comparing pre-approved loans to regular personal loans, the interest rates on pre-approved loans are typically more appealing. In some cases, the lender offers special benefits like waiving processing fees, prepayment penalties, and foreclosure fees. Another benefit is that you can apply for a loan without going to a bank branch. Applying for it online or through a mobile app is simple.

Advantages

Accepting such offers is wise if you know what to do with the money. You shouldn't take out loans just for the sake of it or basically for unnecessary expenses as you have to return the same amount plus interest. Pre-approved loans can be low-hanging fruit if you have a solid plan and are already looking for a loan. It's crucial to determine whether the offered loan amount will be adequate for your purpose before accepting the loan. Check the interest rate, other costs, and the terms and conditions of the loan as well.

Notably, pre-approved loans come for a short time. Therefore, it is important to make a decision at the right time. Accept the pre-approved personal loan offer if it comes with appealing interest rates and other benefits if you need the money and can comfortably repay it. Before accepting the pre-approved loan, make sure you get the same deal you have been shown and choose the appropriate repayment period.

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