Personal loans – Pre Approved Personal Loans

Pre-approval of loans is basically a marketing strategy applied by banks and financial institutions to improve their credit disbursal by cross selling of its products such as loan products to customers on the basis of the existing information possessed by the customer. Pre-approval personal loan is initiated either by the customer or the financial institution. In case of the financial institution, they cross sells the loan products by using your proven track record with them. Pre-approval loan is an in principle approval offered by the entity for offering a loan of a specific amount in case you fulfil the certain eligibility criteria. There are two types of pre-approved loans consisting of Secured loans like pre approved home loan, car loans, auto loans, etc and Unsecured loans like pre approved personal loan and credit card loans among others.

There are various advantages of using a pre approved personal loans. Using a pre approved loan increase your bargaining power because the reason behind the banks offering you the pre-approved loan is your proven track record and financial credentials like good credit history and cash flow. You can use this leverage offered by the pre-approved loan offer for getting better rates from other banks. A pre-approved personal loan/ credit card loan is ideal for those who want cash urgently. It will prevent you from borrowing the emergency money at exceptionally high rates of interest. A pre-approved home loan increases the bargaining power of the buyer as he has the financial ability for closing the transaction. If you would like to have a pre-approved loan, then you should ensure that you have a good credit history and a sound credit rating. Many financial institutions will look out the information from CIBIL- an agency that offers individual credit rating and decide if a person is eligible for pre-approved loan or not. Also, the requirements of a pre-approved loan are same as taking personal loan from a bank.

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