PREAPPROVED LOANS- WHAT, HOW, WHEN

Do you have a credit card? A debit card? A salary account? A savings account? If you have any of these or any other association with a bank then you my friend, would have gotten a message like Congratulations! You are selected for preapproved loan. Contact your bank or associated agency for further details.

And then this message will be followed by how getting this loan will transform your life. How everything will be sorted out and there will not be single worry for you.

But wait, did I apply for this loan?

This typically means that you have passed the approval phase and now selected for the next phase. Banks or lending companies generally sent customer notification by seeing his/her previous credit scores and reports.

Many banks or lending companies offer pre-approved loans to their customers. Now WHAT are these pre-approved loans?
Simply put pre-approved loans mean that a bank or a lending company is willing to give you a certain amount of loan. This approval depends upon your credit score and loan taking history.

The banks which offer pre-approved loans are usually the ones where the customer has their salary/ saving or any other account so they could have an idea about the cash inflow and outflow.
Being preapproved for a loan doesn’t guarantee that you will actually get the loan. The pre-approval usually contain these things:
• Stating that you meet the criteria for the approval of the loan
• The terms and conditions on which you will get the loan. This may contain the interest rates, the payment timeline and any supporting documents

Preapproved loans are offered with various types of loans including personal loans, mortgages, car loans etc. getting those credit cards also fall in this category.

AM I ELIGIBLE?

Banks offer these loans by checking the credit score and the repayment history. A cleaner track record makes you more likely to get the loan. The customers have to meet a certain criteria to get the preapproved loan. For example, the bank in which you have a salary account will know about your cash inflows and cash withdrawals. So seeing your balance, the bank could offer you a suitable loan.

Whereas, the credit bureaus simply approach you and if you agree, then your credit score or track record with the payments are checked and verified. For secured loan, the bank also verifies the asset set as a collateral.

HOW IT WORKS?

There are many lenders who extend their personal loan offers on very easy terms and conditions. Following are some of the top lenders:
• LendingClub
Lending club is a lending company that provides easy to avail Lending Club's Myinstantoffer preapproved loans. This typically depends upon a customers’ credit reports and his track record. A smoother track record makes you a potential borrower.
• Upgrade
This company also provides preapproved loans depending upon your credit score and report. Here if you have a good credit score makes you meet the minimum threshold criteria to become the borrower.
• Best Egg
Here getting a preapproved loan depends solely on your clean credit score.
• Prosper
You get selected if you fulfil the initial selection criteria.
• Laurel Road
Once you began your loan application, you get the rates for preapproved loans based on your credit reports.

HOW LONG DOES IT TAKE?

When the lender or issuing authority is willing to offer you a preapproved loan, they will notify you. If you are filling an online form, it could be either accepted or rejected depend upon your credit history. You can get a formal notification either in the form of letter, an email or even a text message.

HOW DOES THIS PROCESS WORKS?

Getting a notification for preapproval does not necessarily mean that you will get the loan. It all depends upon your application and credit history. As you get the notification, it solely depends on you to initiate the process further or pay no heed to such offers.

If you decide to accept the offer, you will be required to fill out an application form in which you would have to provide your bank history. This will be followed by the lending company reviewing your application. And finally the moment of truth: you getting that money or not.

IS IT BENEFICIAL FOR ME?

Now this my friend, is your call to make. Getting your loan preapproved opens you to many different options. By analyzing your requirements, you can make the right choice. Be it a mortgage, a cur loan or any personal loan.

However be sure to check the interest rates and weigh your options really carefully. Where right kind of loan will fulfil your needs the wrong type will tend to leave you high and dry and can go a long way from there.