New Delhi. In case of urgent need of money, people generally prefer to take a personal loan. This is because banks or non-banking financial institutions (NBFCs) immediately give this loan to those customers with a good credit history. At the same time, banks offer some customers pre-approved personal loans. A pre-approved personal loan is just like a personal loan, the only difference is that the customer does not have to apply to get it, rather the bank itself contacts the customer for it. The interest on this loan can also be less than a common personal loan. However, the bank doesn't need to offer pre-approved personal loans to every customer at a lower rate.

A pre-approved loan is an offer that a bank gives to its customers based on their credit score, income, and their past relationship with the bank. A pre-approved loan means that the bank has already evaluated your financial position and credit score and deemed you eligible for a loan. In this process, the bank sends you an offer that includes the loan amount, interest rate,e, and other terms. Pre-approved loan offer The bank sends the offer to the customer through email, S, MS, or mobile app.

Features of Pre-approved Loan
Pre-approved loans are a convenient option that helps in meeting financial needs immediately. It also has some features-

Faster processing: The loan is approved and disbursed quickly as the customer’s financial information is already available.

Less documentation: In a pre-approved loan, very few papers have to be submitted to the bank. In most cases, documentation is not even required.

No guarantee: This loan is unsecured, so no guarantee is required.
Top-up option: Customers with existing loans can also be given additional loans.

What is the process?
The bank analyzes your credit score and financial history. If you are eligible, a pre-approved loan is offered. After this, the customer can read the loan terms and accept it. According to experts, opt for a pre-approved loan only if its terms and interest rates are suitable for you.

Avoid taking more than you need and treat it wisely. Know the charges like processing fees or prepayment penalty in advance. Even if the loan is pre-approved, the interest rates are not always the lowest. So do keep a close eye on the interest rates.