When you need money, a personal loan may be the right option. There are two types of personal loans. One is a regular personal loan and the other is a pre-approved personal loan. The pre-approved personal loan is different from the regular loan in a certain way, we tell you about it here
You can take a pre-approved loan without submitting any documents
To avail a pre-approved personal loan, borrowers do not need to approach the bank or submit any documents. Banks provide this loan to their customers based on their existing relationship.
The bank already checks whether or not the customer meets its eligibility criteria. Generally, banks provide this loan only to customers with a high credit score. Customers who already have a loan are also offered a pre-approved loan as an add-on.
Regular approval for a personal loan takes time
To apply for a regular personal loan in any bank or NBFC, documents such as identity and address proof on the bank statement are required. Banks or NBFCs provide these loans on the basis of income, cash flow, credit score and repayment capacity.
The interest rate is also decided on this basis. An applicant with good repayment capacity, good credit score and good income can get a low interest loan. However, this loan takes longer to process than a pre-approved personal loan.
Benefits of Pre-Approved Loan
Fast processing: Since the bank already has the customer’s financial information, the loan is disbursed instantly. No documentation: No documentation is required. The bank offers the loan based on pre-existing documents. No Guarantee: Like regular loans, pre-approved loans are also unsecured. This means that no collateral is required for this.