What is Pre Approved Personal Loan and How Does it Work

28 Jan 2022

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Pre-approved Loan – Meaning and how to get oneKey Takeaways

Banks offer Pre-approved personal loans to customers earning high income, capable of repaying debts on time.

A good credit score increases your chances of getting a pre-approved loan.

Steady income and timely repayment of existing debts help obtain pre-approved personal loans.

Check if you are pre-approved for a loan on your internet or mobile banking platforms.

Pre-approved loans require minimal documentation and are processed speedily.

In India, pre-approved personal loans offer quick access to funds, often requiring minimal documentation. With the rise of instant loan online services and swift loan approval online, obtaining a pre-approved loan has become even more convenient. This article explores what a pre-approved loan is.What Is Pre-Approved Personal Loan?A Pre-approved Personal Loan is a loan that banks offer their existing customers with a clean track record of debt repayment. This is a way for borrowers to get access to instant loans online. DBS Bank makes this process simpler for borrowers with a digital application process, low interest rates and instant disbursal of funds.How To Get Pre-approved For A Loan?Follow the below Online Application process for pre-approved loans

Log into your internet or mobile banking account.
Fill the online application form and submit the scanned copies of the required documents.
Once your loan is pre-approved, you can select the disbursal amount and tenure.
The bank will credit the amount into your savings account instantly.

You can contact your relationship manager or call the customer care helpline for assistance with the loan application process.

Open a DBS Bank Account NowFeatures & Benefits of Pre-Approved Personal LoanHaving explained what pre-approved loan means, let us assess its benefits:

Hassle-free paperless documentation: Pre-approved personal loans require no physical documentation. Simply submit scanned copies of your ID, income, address proof, and PAN Card.

Shorter Processing Times: Pre-approved customers enjoy faster loan approval and disbursal.

Collateral Free: Pre-approved loans are a type of personal loan, meaning no collateral is required.

Flexible Tenures: You enjoy flexible loan repayment tenures with easy Equated Monthly Instalments.

Eligibility Criteria for Pre-Approved Personal LoanTo qualify for pre-approved personal loans, you have to be an existing DBS Bank customer and comply with these requirements:

Age: Individual should be at least 22 years old at the time of application. The maximum age allowed is 60 years at the time of loan maturity.

Employment Type: DBS Bank offers personal loans for salaried employees as well as self-employed professionals.

Income: The minimum monthly income required is INR 25,000

Good Credit History: A clean repayment record and good credit score is required to receive a pre-approved offer.

Documents Required for Pre-Approved Personal LoanFor pre-approved personal loans, minimal documentation is required by the applicant such as:

Scanned copies of ID proof

Income proof

Address proof

PAN card

Also Read in Detail: Documents Required for Personal LoanThings to Consider Before Accepting the OfferBefore you accept a pre-approved personal loan, offer there are few things you should consider such as:

Consider the pre-approved loan interest rate and check for processing fees, prepayment, and foreclosure charges.

Ensure that the EMI amount is affordable from your monthly income and won’t strain your budget.

Confirm you meet all eligibility criteria and can provide required documents if asked.

Check if there is a free-look period with the loan which allows you to cancel without any penalties.

Read all terms and conditions before accepting.

Pre-approved Personal Loan vs Regular Personal LoanWhen considering a personal loan, borrowers often encounter two main options: pre-approved personal loans and regular personal loans. Differentiating between these two options can aid in making an informed decision that aligns with your financial goals Below is a comparison table highlighting their key differences:

Feature	Pre-approved Personal Loan	Regular Personal Loan
Eligibility	Offered to select customers based on their credit score and history with the lender.	Open to any applicant meeting the lender's criteria.
Processing Time	Fast approval and disbursal, often within a few hours.	Longer processing time, could range from a few days to weeks.
Documentation	Minimal documentation required since the lender already has most of the information.	Requires complete documentation for identity, income, and address verification.
Interest Rates	Often lower or more competitive due to the pre-vetted nature.	Rates may vary based on credit score, lender, and market conditions.
Flexibility	Less flexible as they may be tied to specific offers or amounts.	More flexible in terms of loan amount and tenure.
Credit Score Impact	Pre-approval does not impact credit score; inquiries are soft checks.	Application involves a hard credit check, which may affect the credit score.
Offer Validity	Valid for a limited period and subject to change.	No fixed validity: offers persist as long as the criteria are met.
Customization	Limited scope for customization in terms of amount and tenure.	Offers greater scope for customization based on borrower needs.

These distinctions help borrowers choose the right loan product tailored to their financial needs and urgency.Also Read: Personal Loan with Low CIBIL ScoreFinal NoteBanks proactively offer pre-approved loans to customers who they believe can repay the loan on time. Pre-approved loans indicate that you have a good credit score and a clean track record. You can obtain these loans to finance contingencies and leisurely expenses.Download the digibank mobile app on your smartphone. Launch the app and click on the "Get Personal Loan" link on the login pageOpen a DBS Bank Account Now*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.