Personal loans have become very popular these days, thanks to the easy availability of loan terms at a time when credit is becoming harder to come by. Everyone needs a loan from time to time. A personal loan can be an excellent option for cash-strapped students or those who are looking for relatively small amounts of money.
With these loans, you can easily get cash off your hands for things like a vacation or a new piece of furniture. Personal loans are typically unsecured, which means that you don’t put up any collateral and are not providing any security for the loan by giving personal guarantees.
If you’re in the market for a personal loan, you may be wondering what the benefits of a pre-approved personal loan are. A pre-approval means that the bank has already determined that they would like to extend a certain amount of money to you. This can be very helpful because it will decrease the amount of time it takes to get your loan approved.
Here are some benefits of pre-approved loans:
1. Minimum documentation:
Pre-approved personal loans usually require very little documentation. This means that you can get your loan faster. The lending institution has already checked your credit and decided to pre-approve you for a loan; therefore, they know that you are a good risk and most likely won’t be putting their money at risk.
One thing that makes the loan process easier is that it doesn’t take very long. If there is too much paperwork and it takes months for your loan request to be looked at, this will make things harder for you than they need to be.
2. Lower interest rates:
Usually, when you are pre-approved for a loan, the bank or lending institution will know that it is highly likely they will get their money back to them in full because your credit history and income make you a good candidate for repayment.
In addition to knowing the likelihood of them getting their money back, they also know that they won’t have to wait very long before their money comes in. This can sometimes lead to lower interest rates because the lender is taking less risk.
3. Quick sanction:
If you’re a consumer who is in desperate need of cash, then you are probably going to want a loan that is sanctioned very quickly. When you’re pre-approved personal loan, the sanctioning process can be much faster within days, rather than weeks or months because the lending institution has already put in all of the hard work of reviewing your case and deciding whether or not they would like to lend to you.
4. A lower interest rate:
If you are applying for a loan and aren’t pre-approved, then the lender probably won’t give you the best rate. This is because they don’t know your income or credit history very well. However, if you are pre-approved for a loan and have already been thoroughly reviewed by the lending institution, there is a greater likelihood that they will approve your loan at a better rate.
Being approved for a loan means that the lender is taking less of a risk when loaning you money; therefore, they might be more willing to give you their best rates to compensate for this.
5. Flexible loan period:
Being pre-approved for a loan will give you access to more flexible repayment terms. This is because the lender has already determined that you are worthy of being lent money and has decided to offer you a loan at this time, so they probably won’t mind lending it to you on your terms. They will likely be much more flexible with the repayment period, allowing you to pay off the loan within whatever time frame works best for your needs.
This can be extremely helpful because it will allow you to get your loan at a time when you need it, and pay it back without any problems.
6. Access to larger borrowing limit:
When you are pre-approved for a loan, the lending institution has already done the work of reviewing your credit history and current income and assets. They know what your budget looks like, which means that they can usually offer you a larger loan amount than if you weren’t pre-approved.
If you are looking for a personal loan, then being pre-approved can be one of the best things that could happen to you because it will streamline your loan application and decrease the amount of time it takes to get approved.
7. More negotiating power:
When you apply for a loan and aren’t pre-approved by the lender, it is more likely that you will have less negotiating power. This is because the lender doesn’t know how reliable you are or whether or not they will get their money back from you.
On the other hand, if you are pre-approved for a loan, you have more power because the lending institution has already decided that they want to give you money. This means that they will likely be more open to your requests and will usually be willing to negotiate their terms.
8. Special discounts:
If you are pre-approved for a loan, then you might get pre-approved loan offers that give you special discounts, such as additional perks, because they believe they will be getting their money back from you. There is usually a certain amount of confidence that comes with being pre-approved. If you are going to be applying for a personal loan, then it’s worth it to see what sort of discounts you can get just by being pre-approved.
Pre-approved personal loans are a great option when it comes to getting cash quickly. If you are looking for an easy way out of a financial bind, then getting a pre-approved personal loan from Piramal Finance can be exactly what you need. They offer flexible repayment terms ranging from 12 months to 60 months, as well as zero prepayment and foreclosure charges on your loan.