To avail of a pre-approved personal loan in India, you must first pre-qualify for one. Financial institutions require their customers to follow specific procedures as part of the pre-qualification, and in lieu, they consider your loan application. Therefore, a pre-approved offer could be your best bet if you need an instant loan for a financial emergency.
To pre-qualify for a pre-approved loan, begin by ascertaining the amount you require and the purpose that the funds are supposed to serve. A word of caution here pertains to the fact that despite all its advantages, a pre-approved offer is still a loan and would need to be repaid in full within the stipulated time frame. Therefore, avail of this offer only if you need an instant loan for an unprecedented contingency and have run out of private sources. Also, ensure that you ask only for the amount you require, and do not get carried away by the seemingly attractive terms. Doing so would ensure that you can tide over the emergency easily without being overburdened by the additional monthly payment.
Assuming that you have decided to opt for a pre-approved loan, the next step entails figuring out how to avail of one. Discussed as follows are tips that can help you to achieve this objective –
Maintain a Good Credit Score –
Due to the unsecured nature of a pre-approved loan, all lenders rely on is your credit score as an indicator of trustworthiness. In the absence of collateral against the loan, lenders put their faith in the fact that you have earned a good credit score owing to being prompt and meticulous about your finances. For them, this acts as an assurance that despite the absence of collateral, you will not default on the monthly instalments and will repay the amount as per the schedule.
Clean up Your Credit Sheet –
Nothing convinces the lenders more than a clean credit sheet to pre-qualify for a pre-approved loan. Such a sheet implies paying your bills on time, minimizing your credit utilization instead of the credit you have at your disposal, and reviewing your financial situation regularly. Avoid late payments as they can reflect on your report for as long as seven years, and maintain a monetary deposit that you can rely upon to pay your bills if the situation calls for it.
Estimate Debt-to-Income Ratio –
Also known as the DTI ratio, this figure indicates whether or not you can take on more financial debts, which an instant pre approved loan entails. To this effect, the higher the DTI, the lower your eligibility to receive another loan because it shows that your debt is almost as much as your income. Before availing of a pre-approved loan, lower the DTI ratio so that your income rises and lenders regard you as a safe customer for a pre-approved offer.
Compare Lenders –
Since pre-approved loans are initiatives the lenders take, the terms and conditions of the offer vary from one lender to another. Therefore, search for a lender who fits well with your credit history and begin negotiations with them. Also, check the fees and charges lenders charge while disbursing the loan, as this amount would also vary as per the specific policies.