Pre-Approved loans are being offered by banks to their existing customers with a clean track record. These are available for Personal, Home, Car, or as a Loan on Credit Card. Each of these offers comes with a cap on loan amounts and a time window to avail the loan.
These loans are broadly classified under two categories:
- Secured Loans
- Unsecured Loan
Questions to answer before you go ahead and avail any of the offers from your bank:
Do I really need the loan?
This is the most important factor to consider before proceeding and obtaining a home loan. Most banks will continue to call you to share deals and encourage you to sign up and avail the loan. However, it is important that you identify your actual needs.
What is the amount that I need to avail of?
You may have a bank loan and the amount of the previously approved loans may be higher, but it is not recommended to take this amount if you really do not need it. Therefore, please pay attention to the actual requirement, not the pre-approved amount, and find out the interest rate that the bank charges. Taking a pre-approved loan can help pay down debt faster, but you need to know the actual interest rate charged for a loan and then compare it with other options available in the market. It is necessary to maintain a good bank balance. Therefore, keep in mind the real requirement and not the amount that is pre-approved.
Know the Rate of Interest that the bank is charging.
You may get the loan delivered quicker by taking pre-approved loans, but one should know the real interest rate paid on the housing loan and then compare it with the other options available in the market. Just getting pre-approved loans with a faster delivery time may not mean that you end up paying a rate that is much higher than other lenders.
Documentation for Pre-Approved Loans
With respect to the paperwork, mostly the pre-approved loans come with a disclaimer. Before the bank goes ahead and gives you the loan, they may require all documents to be made available and be in order. Any discrepancy could lead to revocation if the deal.
Only after considering the above factors can one take advantage of any such bid. However, in case you are in a hurry to buy your next car or move into a new home, a pre-approved offer may come handy and help you save time.
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