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What is a 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. The loan offer need not be checked.


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 & Benefits of a Pre-Approved Personal Loan

  • Minimum Paperwork

The procedure is pre-approved loans is deemed simple because loan acceptance does not need much documentation. Additionally, existing users who are qualified for fast loans do not need to provide any documents since the bank already has your KYC, bank details and income information in their database.

  • Quick Loan Disbursement

If you are an existing client of an NBFC or a bank, the pre-approved loan will be sent instantly into your account.

  • Loan Amounts Vary

Each person's pre-approved loan amount is unique. The loan amount is determined by criteria such as the customer's credit history and repayment history.

  • No Collateral Or Security Required

If you have been pre-approved for loans, you do not need to offer any collateral or security in order to access the loan.

  • Fees And Charges

Lenders impose fees and costs on consumers during and after the disbursement of pre-approved loans, such as deposit fees, processing fees, outstation collection expenses, EMI bounce charges, foreclosure charges, penal interest and so on. The terms and circumstances of the relevant fees and charges vary depending on the lender.

  • Repayment Option

You will be paying back your pre-approved loans in Equated Monthly Instalments (EMIs). If you already have an account with the bank (lender), you may use the auto-debit feature to pay the EMIs. You can also choose the repayment tenor which normally ranges from 12 to 60 months.

  • Moratorium Period

If you have been consistent with your EMIs, you can avail of a moratorium, or EMI holiday, for two to three months during which you won’t have to pay the EMIs. However, interest will be charged during the moratorium period.

  • Competitive Interest Rates

If you have a strong credit history, you may qualify for an instant pre-approved loan offer. Provided you have a good repayment history and don't fall into the credit-risk/lender-risk group, the lender will give you a loan at a reasonable interest rate.

  • Quick Financing

Being eligible for pre-approved loans provides a safety net for when you need immediate money to meet your financial obligations. If the verification procedure is successful, the loan will be authorised and disbursed the same day within a few minutes. You may apply for the loan for any personal reason.

  • Flexible Tenure

Securing a pre-approved loan can help you get flexible repayment terms. If banks trust your creditworthiness, you will have flexible loan tenure or repayment terms. It can vary from 1 to 4 years. You must carefully analyse your loan duration so that you do not fall behind on your payments.

  • Guaranteed Loan

Since these loans are often granted to customers with an excellent credit history and a track record of timely repayment, they are assured to get loans at reasonable interest rates.

  • Paperless Loan Application Process

Most lenders have an online lending facility where you may apply for a pre-approved personal loan by filling out and submitting an online form via their website or mobile app. Soft copies of the needed papers may be submitted in the proper format to the lender's website or mobile app.

  • Special Discounts

To entice you to take a pre-approved personal loan, the bank may provide various incentives such as a processing fee waiver, a cheaper interest rate than for standard borrowers, EMI breaks for 1-3 months, and so on. If you actually need a loan, these benefits will assist to minimise your total predicted debt.

  • Negotiation Power

In the case of a pre-approved loan, the bank approaches you with a product rather than you strolling in with a request. This implies you may negotiate the loan conditions with your bank manager or relationship manager to lower the interest rate or extend the duration or payback time. This benefit is not accessible if you submit an online application since there is no human interaction.


Pre-approved personal loans are often given at a cheaper interest rate. Although interest rates vary based on your credit score and connection with the lender. Below table below offers an immediate comparison of the interest rates given by different lenders.


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Compare Pre Approved Personal Loan Interest Rates

Lending Partner Name

Interest Rate Range

Avail Laon


30% p.a. Onwards

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14% p.a. Onwards

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15.95% p.a. Onwards

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IIFL Finance

18% p.a. Onwards

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21% p.a. Onwards

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15% p.a. Onwards

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Kotak Mahindra Bank

10.99% p.a. Onwards

Apply Now

L&T Finance

11% p.a. Onwards

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16% p.a. Onwards

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24% p.a. Onwards

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Muthoot Finance

14.50% p.a. Onwards

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PaySense Partners

14% p.a. Onwards

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9.99% p.a. Onwards

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2% p.m. Onwards

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SMFG India Credit

12% p.a. Onwards

Apply Now


1.5% p.m. Onwards

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10.99% p.a. Onwards

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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 A 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.



FAQs on Pre Approved Personal 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.

Each NBFC and bank has a different maximum limit for pre-approved loans. Certain institutions, such as SBI Bank, HDFC Bank, Bajaj Finserv and Axis Bank, have a standard sum of up to ₹25 Lakhs.

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.

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.

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

Pre-approved loan offers do not guarantee that your loan application will be granted. Even though your loan request is "pre-approved," the lender may reject it if your credit score is insufficient or you do not fulfil an eligibility condition during the verification procedure.

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