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Pre-qualified or pre-approved loans are the loans offered by banks to customers with a clean credit history, subject to a few conditions. Most of the times, the bank executive who gets in touch with you offering a pre-approved loan will list out all the offers and assure you minimum documentation. So now the question is, how minimal are the procedures involved in sanctioning of a pre-approved loan and what are its quintessential features?
Banks analyse your credibility by reviewing the track record of accounts you maintain with them. For instance, your savings account reveals a set of information related to cash outflow, existing loans, and outstanding payments. Even your credit cards provide details of your financial transactions, which gives banks an understanding of your approach towards debt repayments. Generally, banks take into account the above mentioned parameters to decide the amount that you could be eligible for.
Pre-approval does not guarantee you a personal loan sanctioning and it is purely based on the successful verification of documents required by the bank for processing your request. By and large, the conditions for pre-approval are similar to that of a regular loan request, as borrowers will have to submit documents such as bank account statement, income statement, PAN number, etc. For existing customers, the process would be comparatively simple as banks would have verified all the essential details before offering a pre-approved loan. For secured loans, the sanctioning is subject to satisfactory valuation of the property being mortgaged.
Documents to be submitted at the time of application depends on whether the person is salaried or self-employed. It generally includes all the documents required for a regular loan sanctioning. However, applicants will be exempt from prior checks and complex procedures involved in a normal loan application.