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What is Pre approved loan?

A pre-approved loan is a loan that has already been approved by the lender without you applying for it. It is a product offered by banks and financial institutions to customers, who have a good repayment history.

If you are in dire need of funds to finance your personal expenses such as festival celebrations, wedding expenses, home renovation, etc., you can take out a personal loan from a bank or NBFC. A personal loan is an unsecured loan, meaning you do not need collateral to avail it. All you need to do is provide some basic details about your income to the lender and submit a few documents such as your identity, address, and income proofs.

If your credit score is good (upwards of 750), your personal loan application will be approved at quite possibly the best terms. However, there is a way you can bypass this entire approval process and avail a personal loan almost instantly.

What happens is, if you have a good credit profile, some lenders might have certain personal loan offers already approved for you based on your credit history. Such loans are known as pre-approved loans. Lenders usually notify you through email or SMS if there is a pre-approved loan offer for you. Pre-approved loans are usually processed instantly as your eligibility for the loan offer need not be checked.

Features of Pre-Approved Personal Loans

Some of the features of pre-approved personal loans are as under:

  • Minimal or No Documentation: Since the loan has already been approved based on your credit standing, you need not submit any document as a proof of income. If you already have a relationship with the lender, your loan can be approved without even an identity proof and address proof.

  • Quick Disbursal: Since the lender has already evaluated your creditworthiness, it does not take much time to process the loan. As soon as your application is processed, the amount is disbursed to your bank account within 24 hours or less.

  • No Collateral Required: As is the case with any personal loan, no collateral is required to avail a pre-approved personal loan.

  • Flexible Tenure: Banks/NBFCs are usually more flexible with regards to the tenure of pre-approved personal loans. You can choose a tenure ranging from 12 to 60 months as per your suitability.

  • Varying Loan Amount: The loan amount, in case of a pre-approved loan offer, varies for different individuals. The pre-approved loan amount depends upon your creditworthiness and your existing relationship with the bank/NBFC.

Pre Approved Personal Loan Interest Rates

Pre-approved personal loans are usually offered at a lower rate of interest. Although the interest rates vary depending upon your credit score and your relationship with the lender, you may refer to the following table for a quick comparison between the interest rates offered by various lenders on Bajaj MARKETS along with the applicable processing fee.


Interest Rate

Processing Fee

Bajaj Finance Limited

14% p.a onwards

2% - 3% of the loan amount + GST or ₹500 + GST (whichever is higher)

Fullerton India

12% p.a onwards

Between 0% - 6% of the loan amount


14% p.a onwards

2% - 2.5% of the loan amount + GST or ₹500 + GST (depends on whichever is higher)

Axis Bank

10.49% p.a onwards

Upto 2% of loan amount

Muthoot Finance

13.75% p.a onwards

2% - 4% of loan amount

SBFC Finance Pvt Ltd

14% p.a. onwards

2% of the loan amount


33% p.a onwards

₹1,200 or 2% of loan amount, whichever is higher + GST as applicable

Prefr Partners

21% p.a onwards

3-5% (approximately) with minimum processing fee of ₹1,500 + GST


24% p.a onwards

Starting from ₹399 + ₹100 stamp duty


14% p.a onwards

From ₹500 to up to 6% of the loan amount

Yes Bank

10.70% p.a onwards

From ₹1499 to 2.50% of loan amount


Benefits of Pre Approved Personal Loans

Some of the benefits of pre-approved personal loans are listed below:

  • Guaranteed Loan: Since the lender has already pre-approved the loan offer for you, rest assured, your loan will be successfully processed and you will get the amount in your bank account. However, if your credit score is too low at the time of application or you are unable to furnish the required documents, your loan might be rejected.

  • Quick Disbursal: Since the loan has already been approved based on your credit standing, the lender will not check your eligibility. As a result, the processing time for the loan would be much less. In some cases, the loan is processed almost instantly.

  • Lower Interest Rate: If you have a good credit history, many lenders offer pre-approved personal loans at lower interest rates. The reason why the interest rate on pre-approved loans is usually lower is that these loans are offered only to those individuals who have a good credit profile and have maintained a good repayment history.

  • Minimal Paperwork: Since the loan is pre-approved, you need not submit any income proof to the lender. Also, if you already have a relationship with the bank/NBFC, you might not even be required to furnish the identity and address proofs.

  • Special Offers: In order to lure you to avail a pre-approved loan, many banks/NBFCs offer special benefits on pre-approved loans such as processing fee waivers, EMI holiday benefits, and more.

Eligibility for Pre Approved Personal Loan

It is fairly simple to be eligible for a pre-approved personal loan offer from a bank/NBFC. In most cases, you will have a pre-approved loan offer from a lender if:

  • You have a good credit score, i.e. 700 to 750 and above.

  • You have an existing relationship with a lender. For example, you are more likely to get a pre-approved loan offer from a bank you hold an account with.

How to Apply for Pre Approved Loan

Applying for a pre-approved personal loan is a fairly simple process. In most cases, if you have a pre-approved loan offer from a bank/NBFC, you are informed about the same through an SMS or email. You can also check with the lender of your choice if they have a pre-approved personal loan offer for you. Once you know that there is a pre-approved loan offer, you need to follow the below-mentioned steps to avail the loan:

  • Submit a duly filled loan application form to the lender. You may find the form either on the lender’s website or obtain it from any of the branch offices of the concerned bank/NBFC.

  • Choose the required amount and the loan tenure. Since it is a pre-approved loan, you can choose a loan amount only up to the maximum amount approved for you.

  • Once you have submitted your application, it should not take much time for the lender to process your loan application. In most cases, the loan amount would be disbursed within 24 hours of approval.

Documents Required for Pre Approved Loan

While pre-approved personal loans are processed with minimal paperwork, you might still need to submit a few documents to the lender. Here are some of the documents that you may be required to submit:

  • Identity Proof: Aadhaar card, Voter’s ID Card, PAN card, passport, etc.

  • Address Proof: Aadhaar card, passport, driving licence, utility bills, rent agreement, etc.

Note: The lender might not ask for a proof of income if your loan is pre-approved.

Tips to Get Pre Approved Personal Loan

  • Maintain a Good Credit Score: If you have a good credit standing, you will not only get more pre-approved loan offers, banks/NBFCs are also more likely to offer you loans at lower interest rates.

  • Check the Terms and Conditions Carefully: As with any financial product, it is always advisable to go through the terms and conditions of the loan offer carefully. Do check if there are any hidden charges involved that the lander might not have mentioned earlier.

  • Do Your Research: Before you decide to take a personal loan from a particular lender, it is always better to check with other lenders if they have a better loan offer for you. A little research can save you a lot of money in the long run.

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FAQs on Pre Approved Personal Loan

✔️✔️How can I use my pre-approved loan?

Since it is a personal loan, you can use the loan amount to finance any of your personal needs. There is no end-usage restriction on personal loans, which makes them quite versatile.

✔️Does pre-approval guarantee a loan?

No. If you have a pre-approved loan offer from a lender, in all likelihood, your loan will be processed successfully without any problem. However, if your CIBIL score is too low at the time of application or if you are unable to furnish the required documents, your loan can also be rejected.

✔️Can I avail a pre-approved loan anytime?

Pre-approved loan offers are usually for a limited period only. Therefore, if you are planning to apply for a personal loan and you have a pre-approved loan offer, it is advisable to apply as soon as possible.

✔️Are there any charges associated with pre-approved loans?

Yes, just like any other personal loan, you have to pay the applicable interest and the processing fee on the loan amount.