Watch out for these 3 Myths about Pre-Approved Loans
Have you been offered a pre-approved loan recently? If so, then you may be one of the few Indians with a clean credit history. When a bank or financial company calls to tell you that you can obtain a pre-approved loan, it means that the lender finds your repayment capacity up to the mark.
But a pre-approved loan may not be what you’re looking for. And if you’re considering one, then you need to keep an eye out for the common misconceptions that credit-seekers usually have with regard to pre-approved loans.
Here are a few myths about pre-approved loans that you need to know about.
Myth 1 – Pre-Approved Loans Have Low Interest Rates
It’s probably the first thing that every tele-marketing executive will try to tell you; that your pre-approved loan comes with discounted interest rates. Most lenders will give you pre-approved personal loans at a rate of interest that’s 1% to 2% lower than what it is for the regular borrowers. For instance, if a bank provides personal loans at a 19% interest rate to regular customers, it may offer pre-approved personal loans at a reduced 17% interest rate to a privileged few.
But that doesn’t necessarily mean it’s the best deal out there. In fact, there may be far better deals out there. It’s important to consider other options as well—such as a loan against fixed deposit or a credit card—before opting for a pre-approved loan.
If you’re seeking financial aid, consider the wide range of products offered by Bajaj Finserv, ranging from home loans to loans against shares.
Myth 2 – Your Pre-Approved Loan is Guaranteed
You may have been offered a pre-approved loan, but that necessarily doesn’t mean that you’ve already been sanctioned one. Although your chances of obtaining a pre-approved loan are quite high as opposed to an ordinary one, there are still a few technicalities that may block your way. This often happens in the case of pre-approved home loans.
If the bank needs documents that you don’t have, then your loan won’t be sanctioned. Even a small discrepancy in your documents may be reason enough for the lender to cancel your pre-approved home loan offer. ‘What is pre-approved home loan?’ you may ask. Well, it’s a secured loan that a bank or financial institution offers to help you build or buy your own home.
Myth 3 – You Get to Choose the Amount You Want
This is another one of the common myths about pre-approved loans. Banks offer pre-approved loans of certain amounts, and this amount is based on your repayment history, account balance, income level and so forth. Although, you’re in a better position to negotiate with the bank for the amount of your pre-approved loan, you also need to remember that you don’t have unlimited leverage. The bank won’t raise your loan amount beyond a certain limit, which may not be what you want.
It’s important to choose a loan that suits all your requirements. Consider a reputed and trustworthy lender like Bajaj Finserv, known for their array of financial products and services.