Instant Personal Loans

Everything you need to know about pre-approved personal loans


Nowadays, we see a lot of emailers and SMSes from our banks informing us that we are eligible for a pre-approved personal loan. This brings to question as to what is a personal loan and how can one use a personal loan? Personal loans are unsecured loans that are available to the salaried or self -employed individuals. These are highly flexible loans that do not require any kind of collateral. So, in case of emergencies the funds can be received immediately and in case of planned expenses, you can avail the amount without keeping any asset on the line. The flexible loan can be put to any number of legitimate uses. You can use it during emergencies to pay off a medical bill or consolidate all existing debts under a single head. Alternatively, you can use it to manage wedding funds, your higher education fee, plan an exotic vacation, renovate your home or buy a vehicle.

What are pre-approved personal loans?

Pre-approved personal loans are offers extended to a borrower by the lender after assessing the creditworthiness of the individual. Being pre-approved means that the lender has already assessed your profile against basic minimal parameters and has found you eligible. They have then extended a loan offer to you and upon acceptance, you will be sure to receive the loan.

Why are you chosen for a pre-approved loan?

The question remains as to how the lender chooses a particular person for a pre-approved loan.

Here is a list of criteria that are considered:

  • You are a person with good to exceptionally good credit rating
  • You have a history of timely payment towards credit card bills
  • You have never defaulted on your other loans EMIs
  • You have a steady and stable income
  • You have a good savings account balance

However, being pre-approved does not mean that there will be no documentation required. The basic documentation and other formalities associated with an instant personal loan have to be completed. The only bonus is that you have been chosen by the lender and so the initial screening has been done before the loan offer, meaning you can receive the loan quickly and without hassle. Upon acceptance, the lender does follow the normal procedure of documentation verifications and other related procedures.

Documentation needed to receive a pre-approved loan

Do keep the following documents handy upon acceptance of a pre-approved loan offer.

  • Bank statements
  • PAN card
  • Aadhar card
  • Salary slips of last three months
  • Residence proof (if permanent address is different in the Aadhar card)

Advantages and Disadvantage of pre-approved personal loans


Low-interest rate: Since you possess good credit score and the bank/lender has chosen you for a personal loan, you will be rewarded with a lower rate of interest as compared to someone who applies for the loan. It is always advisable to opt for lower interest rate loans as it means less amount paid out as interest upon completion of the loan tenure.

Quick processing: The initial screening of your credentials ensures that the loan processing is lightning fast.

Better negotiation power with the borrower: Being a pre-approved borrower, you have the power to negotiate the loan terms to ones that best suits you.


Limited time frame: These offers are valid for only a limited time period. So, you will have to take the decision within a short time span.

Only opt for actual requirement: It is not necessary to avail the offer extended if there is no actual need for a personal loan. The loan has to be repaid and within a specific time span as it has a long-term impact on your credit rating. So, unless absolutely needed, do not accept the loan offer. But if you’re in need of money, there isn’t going to be a better loan offer than a pre-approved personal loan.


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