Lenders usually offer pre-approved loans to their existing customers whose credit profiles match the set loan eligibility criteria. They usually select beneficiaries on the basis of the preliminary evaluation of their credit score, monthly income, job profile, employers’ profile, transaction history and other criteria used for deciding loan eligibility.
According to Gaurav Aggarwal - Director, Unsecured Loans, Paisabazaar, individuals with good credit score, excellent transaction/repayment history and/or good account balances, in case of existing bank deposits, are offered pre-approved loans.
“Similarly, existing credit cardholders with good credit scores and excellent bill repayment history are offered pre-approved loans against credit cards by their card issuers,” he explains.
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Pre-approved loans should, however, only be considered as an ‘invitation to apply’ offer, as the final loan approval may depend on further credit evaluation by the concerned lender.
Nevertheless, as Aggarwal says, lenders usually make substantial credit evaluation before offering pre-approved loans, so the chances of approval and swiftness of loan disbursal in pre-approved loans are higher. All that the customer needs is to respond to the links forwarded to them through SMS, internet banking, mobile banking or phone banking channels and the loan processing system is then activated by the lender.
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In case the customer is an existing customer of the lender, the pre-approved loan is disbursed directly to the account in a very short span of time.
The process to get pre-approved loan is considered hassle-free because it doesn't require heavy documentation for loan approval, according to Bankbazaar.
No collateral or security required
Borrowers are not required to provide any security or collateral to obtain these loans.
Borrowers can repay pre-approved loans in Equated Monthly Instalments (EMIs). Those customers who have an existing account with the lender, can opt for auto-debit facility to pay the EMIs. The standard repayment tenure is 12 to 60 months, according to Bankbazaar.
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