Learn about regular and pre-approved loans: If you are planning to apply for a loan, this article is for you. In life we often need to raise more funds to meet various needs; In such a situation, taking a loan from a bank is considered a better option. However, before granting the loan, the bank checks your credit history and CIBIL score. The loan is granted to you on the same basis. But there is also a loan that does not need to be requested. The bank itself offers you a “pre-approved loan” in advance.
However, the bank provides pre-approved loans to those customers who have a good credit report or CIBIL score and have the ability to repay the loan. Let us know how a pre-approved loan is different from a regular loan and what its benefits are.
What is a pre-approved loan?
A pre-approved loan is a loan that customers do not need to apply for. These loans are granted by banks. All banks have their own terms and conditions for pre-approved loans, based on which they are issued. The bank can provide pre-approved loans to its customers whose credit score and sources of income it knows. The bank identifies these clients and grants them this loan.
How is it different from a normal loan?
When you apply for a regular loan, the first thing the bank takes is your financial information. On that basis a loan is granted. Whereas in the case of a pre-approved loan, the bank already has all the information related to you. The bank tells you the regular loan amount, interest rates, etc. after reviewing your application, while with pre-approved loans this information is provided to you in advance.
Pre-approved loan benefits
If the bank offers you a pre-approved loan, you can accept it if you need it. In such a situation, you will find it easier to raise funds and the money will be managed on time. The biggest advantage of a pre-approved loan is that you do not need to visit the bank to obtain the loan or carry out any paperwork. While applying for a regular loan has a negative impact on your credit score, failing to accept a pre-approved loan has no impact on your credit score. Many banks often offer pre-approved loans to customers who make credit card payments on time and repay previous loans.
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