How to get pre-approved loan and use smartly to achieve goals

Planning for the dream house either car or any personal loan pre-approved loan can be helpful to fulfil your goals because finance is one of the important criteria which enhance purchasing capacity when you are in process to close the deal.


People mostly make one mistake when they are in the process to finalize the deals as they engage in the loan approval exercise in that case some time they miss the opportunity to get a better deal.

Let's explore what is the correct process to get the loan when we have a requirement. When I focus on the world requirement it means we should have a specific reason behind approaching the loan, don't take unnecessary until not required. some factors which need to focus like retails inflation, fixed or variable interest rate, higher processing fee etc.

How can I get a pre-approved loan?

A pre-approval is an approval in principle based on the information provided at the time of the pre-approval application. As per eligible criteria depend on the  credit score, paying capacity like salary income or earning from business, past credit history and current relationship with the bank

However It isn't a guarantee that the loan will be funded, as once deals are closed with sellers like home or car or any other thing you'll still need to complete a full application which requires final unconditional approval by your lender.

Process of pre-approved loan

Banks prepare a list of customers who have good credit score and past history with the Bank and such customer lists prepared at their zonal office or regional office of bank such selected customer details are shared with the respective branch of bank which has a customer account. 

Such respective branch office officer inform to the customer regarding the pre-approved loan offer on a regular basis and further preference given to those customers who are interested to take a loan.

a mortgage pre-approval usually lasts for sixty to ninety days. Once it expires, you may connect with your bank , this usually does not take an excessive amount of time to approve again as they already have all details.

In general bank charge process fee which can be 0.25% -1% depends on the various factors however it can be negotiable and can be less than that what they charge.

Pre-approved offers do not affect your credit score unless you follow through and apply for the credit. As the lender has identified you as a good prospect based on information as per credit history, however the pre-approval does not give a guarantee that you'll get the loan.

To get pre-approved you'll need proof of assets and income, good credit history, employment verification, and other types of documentation your bank may require.

Type of pre-approved loan

There are two types of pre-approved loan first one is known as term loan and second known as demand loan. Term loans are such loans which offer more than 36 months like car loan, home loan, personal loan. 

Demand loans are less than 36 months and they are like short term loans. Such loans are mostly promoted by the bank from time to time and offer to customers with different lucrative schemes and benefits.

Advantage of pre-approved loan

Loan disbursement fast as it's already approved even you can get the loan amount disbursed within a day to your account this is because the bank already has your details.

Pre-approved loan can help you get a flexible tenure on repayment option as the banks would trust you with your credit history, however you must carefully consider your loan tenure and repayment option.

As you received a pre-approved loan option it means you have a good credit history you can get competitive interest rates on such loans, with such a good credit record the bank would offer low-interest rates on pre-approved loans. 

Pre-approved loans offer less or paperless documentation as your KYC, income, identity proof and other details already with the lender.

the customer is in a better position to close the deal with the seller as they already have loan approval. as the approval received with all checks means having a pre-approved home loan also identifies you as a serious buyer in the eyes of the seller  which can help you to negotiate for a better deal. 

Disadvantage of pre-approved loan

Sometimes people take out a loan because it was already approved due to the psychological impact of an available fiancé without understanding the necessity of the loan.

Processing fee impact if the validity of the approval letter expires hence the customer bound to close the deal with in the time limit.

Pre-approved loans have floating  interest rates that may increase for pre-approved customers. Therefore, check the interest rates with your lender before accepting a loan offer although it is not mandatory that the loan interest rate will increase.

However If the interest rates fall, during the pre-approval and disbursal process, the customer may not be able to benefit from the reduced rates.

it's not guaranteed that the principal amount approved will get the same amount disbursed to the customer. Pre-approved offer only indicates that you’re eligible for the loan. It doesn’t mean that you’ll get approved for the loan definitely.


Loan is one of the finance instrument which help to fulfill our dreams, however it is important to know in details before apply for loan should know all term and condition in details which help to understand all pro and cons. smartly use of loan facility is always appreciable however unnecessary involvement create financial burden. 

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