Pre-approved loans are not different from regular loans in their nature, except that you’re not the one reaching out to your lender. On the contrary, it’s the other way around; it’s an offer to you from the lender. This means that the lender already has an offer for you before you apply to borrow funds.
Such loans are often offered to customers who have previously availed of a loan from a lender and have maintained a good track record in repayment. However, note that before making pre-approved loan offers, the lender thoroughly evaluates the customer’s creditworthiness.
Why should you take a pre-approved loan offer?
Here’s why you should take a pre-approved loan:
- Competitive interest rates
Usually, pre-approved loan offers come with competitive interest rates. This means that you pay lower interest than you would otherwise pay for that same amount of loan. This brings down your monthly EMIs, thereby helping you to address your needs affordably.
- Less processing and disbursal time
When you’re offered a pre-approved loan, the lender has already evaluated your financial standing and credit history in detail. This means that the processing time for the loan is short, and the disbursal is quick. Bajaj Finserv offers various pre-approved loans on home loans, business loans and personal loans, cards, insurance, and EMI Network to help fulfil all your financial needs. These special offers skip the need of standing in a queue or filling forms. Everything is already done for you, and you get the money in the bank in one-step verification. By providing a few basic details, you can check your pre-approved loan offer within seconds.
Although pre-approved offers make the process of availing of finance convenient and simple for borrowers, here are the factors that you should evaluate before you avail of one:
1. Exercise caution
A pre-approved loan offer can seem very tempting as a financial institution coming to you and offering money. However, remember that there’s no such thing as a free lunch. Just like any other loan, you have to repay it with interest.
Of course, if you need money for an emergency or to meet specific life goals, it’s a great deal. You can fulfil your obligations for the time being and repay the loan over an extended period of time, stress-free. However, note that unless you really need a loan, it’s better to give such offers a second thought.
2. Read between the lines
Just because the lender is offering you the loan, it doesn’t mean you should sign on the dotted lines without reading the fine print.
It is essential to the terms and conditions on late loan repayment and rates charged on loan foreclosure and prepayment to make an informed decision.
3. Compare various offerings
Comparing various loan pre-approved loan offers is an essential part of the borrowing exercise. Comparing will give you a holistic idea of multiple loan offers and help you seal the best deal.
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