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Choosing the right personal loan starts with understanding what fits your needs best.
Pre-approved or regular? Know which personal loan works better for you.
When it comes to borrowing money, personal loans often emerge as a quick and flexible option. But not all personal loans are created equal. Banks or NBFCs today offer two major types of personal loans, including pre-approved personal loans and regular personal loans. Each has its terms, processing time, and eligibility criteria. Understanding the key differences between the two can help borrowers make better financial decisions.
What Is a Pre-Approved Personal Loan?
A pre-approved personal loan is typically offered by banks or financial institutions to existing customers with a good credit history, steady income and a strong repayment record. These loans are based on the customer’s financial profile and past banking relationship. Since the lender already has access to the borrower’s financial data, the approval process is faster, and in many cases, the funds are disbursed within a few hours.
One of the biggest advantages of a pre-approved loan is minimal paperwork, since most information is already available with the lender. However, these offers are time-bound and subject to the borrower continuing to meet the eligibility criteria at the time of availing the loan.
What Is a Regular Personal Loan?
In contrast, a regular personal loan is available to both new and existing customers but involves a complete credit assessment. Applicants have to submit income proof, employment details, and other documents for evaluation. The approval process may take a few days, depending on the lender’s internal checks.
While regular loans take more time to process, they offer borrowers the flexibility to compare interest rates and loan terms across lenders. This makes them an ideal choice for those who want to explore better deals, negotiate terms, or are not eligible for pre-approved offers.
Key Differences
Eligibility
Pre-Approved Loan: Offered to select individuals, usually existing customers with a strong credit record.
Regular Loan: Open to all applicants who meet the lender’s eligibility criteria.
Processing Time
Pre-Approved Loan: Instant or within 24 hours due to pre-verification.
Regular Loan: Typically takes 2–7 working days, depending on documentation and internal checks.
Documentation
Pre-Approved Loan: Requires little to no documentation as the lender already has customer data.
Regular Loan: Requires full documentation, including KYC, salary slips, and bank statements.
Interest Rate
Pre-Approved Loan: Usually calculated based on your credit history and typically ranges between 10.49 per cent to 14 per cent pa.
Regular Loan: Depends on the borrower’s credit score and typically ranges between 9.50 per cent to 44 per cent pa.
Whether you need instant funds or are planning to compare options for a better deal, knowing the difference between these two types of personal loans can help you make a smarter borrowing decision.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
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Delhi, India, India
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