A pre-approval is a preliminary evaluation of a potential borrower by a lender to determine whether they can be given a pre-qualification offer. Pre-approvals are generated through relationships with credit bureaus which facilitate pre-approval analysis through soft inquiries.
Keeping this in view, are pre-approved loans guaranteed?
In lending, pre-approval is the pre-qualification for a loan or mortgage of a certain value range. … Although, to a typical consumer, “you’re pre-approved” means “you already passed the approval process and therefore are guaranteed to be immediately granted the loan if you apply,” the literal meaning is different.
Keeping this in consideration, how do I get pre-approved for a loan?
You can check the pre-approved loan offers by logging into the net banking account of your existing bank. You can also call the bank for knowing about the pre-approved loan offers if you have a good credit score and repayment track record.
How long is pre-approval valid?
Prequalification means the creditor has done at least a basic review of your creditworthiness to determine if you’re likely to qualify for a loan or credit card. … But if you’re able to apply for prequalification with a soft inquiry (or no inquiry), it’s generally a good idea.
A pre-approved loan has many advantages for a borrower and for lender as well. A pre-approved loan gives you idea to know how much loan amount you can borrow or the maximum limit of loan. You can discuss and negotiate about the terms and condition with the lender and get a better deal.
Once you have found a home that meets your needs and your pre-approval amount, you can start the sale process by giving the seller the pre-approval letter and making an offer on the house. If the seller accepts your offer, the next step is to start the underwriting process.
You must have received SMS’s from banks saying “Your pre-approved limit for debit card EMI-loan is Rs. 80,000. … Simply put, a pre-approved loan is an offer for a loan based on your credit worthiness. Banks provide such loans to potential borrowers, based on fulfillment of certain pre-determined terms and conditions.
Pre-approved home loans provide sanction of loan limits before finalization of the property and help customers negotiate with the builders or sellers. The processing fee applicable to the home loan is non-refundable and is collected at the time of sanction. …
Loan processing becomes easy and fast
The application for a pre-approved home loan is faster and simpler than a regular home loan. Since at the pre-approval stage, the lender has already verified the income documents of the borrower, the process of loan dispersal becomes easy and quick.