How to Get a Pre-Approved Personal Loan? Step-by-Step Guide

Having access to quick funds plays a crucial role in managing both planned and unplanned expenses. Whether you need funds for a medical emergency, to clear debts, or for your studies abroad, a personal loan is a reliable option that provides quick access to funds and ensures you're financially prepared for when the need arises.

Table of Content

• What is a pre-approved personal loan?
• How to apply for your pre-approved personal loan online?

But a traditional personal loan process is both time-consuming and involves multiple verification checks. Alternatively, a pre-approved personal loan helps simplify the process by offering eligible borrowers quicker access to funds with minimal formalities.

Pre-approved personal loans are particularly attractive to borrowers who value speed and simplicity. This guide explains what a pre-approved personal loan is, its benefits, and how you can apply for one efficiently.

What is a pre-approved personal loan?

In a standard personal loan application, borrowers apply with a bank or NBFC and wait for the lender to evaluate their eligibility based on income, CIBIL score, repayment history and several other factors. A pre-approved personal loan, however, is a short-term credit loan option offered to select individuals whose financial profile has already been evaluated by the lender. Banks and NBFCs extend this form of credit to their existing customers with a good credit score and a stable financial profile.

A pre-approved personal loan operates like any other personal loan, but with added conveniences. Some of the advantages of applying for a pre-approved personal loan include:

• Minimal documentation and quicker access to funds. Because your basic eligibility is pre-checked, lenders usually need minimal documentation, resulting in prompt disbursements.
• Lenders often provide competitive personal loan interest rates as compared to other loans, especially to creditworthy individuals.
• Borrowers enjoy quicker approvals and potentially quicker fund disbursement as the lender has already assessed the risk involved with the profile. 
• Whether it’s travel, medical expenses, a wedding, debt consolidation or any personal need, you can use the money for any purpose.
• A pre-approved personal loan without collateral requires minimal documentation. Lenders may also offer them at lower processing fees. This helps save time and effort, and the upfront cost of borrowing. 

Suggested Read: Fastest Ways to Get a Personal Loan Approval

How to apply for your pre-approved personal loan online?

Applying for a pre-approved personal loan online is a straightforward process:

Step 1: Explore Your Options 

Rather than settling for the very first offer or lender, explore available options. Compare loans based on the interest rates offered, repayment terms, lender’s reliability, processing fees and more. This will help you choose an offer that best meets your requirements. 

Step 2: Check Your Eligibility

Visit the lender’s website to look for any pre-approved loan offers. Lenders often also send communication for available pre-approved offers via SMS, calls or emails. Check if you meet the lender’s eligibility requirements. Approvals often depend on some basic eligibility checks, including a minimum credit score, stable income, nature of employment, existing debts, age and more. 

Step 3: Decide the Loan Amount and Purpose

A pre-approved personal loan allows borrowers to utilise the credit according to their flexibility. However, lenders often place a borrowing limit. Start by understanding your requirements and the loan amount you need based on your requirements and repayment capacity. It is advisable to borrow only what you can easily repay. You can use a personal loan EMI (equated monthly instalment) calculator to determine a repayment that fits within your budget. 

Step 4: Apply and Accept the Offer

Review the loan terms and submit the loan application form with the required documents. Once your application is approved and documents are verified (which is very quick), the loan amount is usually credited promptly. 

Pre-approved personal loans follow a straightforward evaluation process. However, certain factors impact how smooth and hassle-free the process is. Before extending a pre-approved personal loan offer, lenders assess several key factors, including:

Credit history: By maintaining a good credit score, keeping your credit utilisation low and paying your debts on time, you indicate that you’re a low-risk borrower, which makes the approval more seamless. 

Relationship with lender: Besides your credit activity, spending and savings behaviour and past borrowing behaviour, your long-standing relationship with your lender improves your eligibility for higher loan amounts, better interest rates and quick approvals. 

Income stability: Lenders evaluate your income flow, job stability and sources of income to determine whether you can comfortably manage to repay your loan on time or not. 

Personal loans offer convenient access to credit during urgent financial situations. At Muthoot Finance, the process of applying for one becomes all the more easier with a simplified application process, multiple loan offers, quick approvals, flexibility for repayment and competitive interest rates.