If the term “pre-approved loan” makes you think that availing this type of loan is easy, you are not wrong. That is, as long as you have a good credit history and can fulfil a few other requirements. Pre-approved loans are offered to those whose creditworthiness has been considered acceptable by
financial institutions. These collateral-free short-term loans are usually offered to existing customers. Since the lender has already checked your credibility as a borrower, pre-approved loans are processed fairly quickly. At the same time, you get competitive interest rates and flexible repayment terms. So, if you wish to get pre-approved for a two-wheeler loan, do take into account these four factors-
Credit score No matter which financing institution you approach, one of the first things they will check upon receiving your
loan application is your credit score.
Also Read: Here is What You Need to Know About Two-Wheeler Loans Existing Loans If you have taken out any form of loan in the past, then this point is worth a glance. Next to your
credit score, the aspect most financial institutions check is your existing loans and the total amount of debt you currently owe to the lenders. They also check if you have made all your past payments on time. If you have, itincreases your creditworthiness. Meanwhile, if you have missed even one payment or
delayed a past payment, it can hinder your chances of getting a pre-approved loan offer.
Full Repayment
Other than your standard EMIs or Easy Monthly Instalments, every loan in India comes with two other forms of repayment - part-payment and prepayment. In part-payment, the borrower pays a bulk amount to the lender, which is lesser than the total principal amount owed. But it also covers a significant amount of the total money due. On the other hand, prepayment is the process wherein the lender will settle the full amount of the loan before the official end of tenure. In other words, this process is also referred to as foreclosing. It is generally viewed as a healthy repayment habit by new lenders. It indicates that you are financially stable and well-off to pay your loans (in full) in advance.
Also Read: All Documents You Need To Apply For A Two-Wheeler Loan
Limited inquiries
Credit rating agencies take into account four main factors when they are calculating your credit score. Oneof them is the number of inquiries made by financial institutions or lenders in a given month. These are treated as hard inquiries. The more inquiries you have in a month, the greater impact it will have on your credit score. So, in order to get a pre-approved two-wheeler loan offer, you need to keep the hard inquiries at a minimum. When you are looking for a pre-approved offer, do your prior research and find outabout the lenders, who are offering pre-approved loans. Choose up to two lenders and then share your eKYC details. This way, you will have only two hard inquiries on your credit report, thus lowering its impact and increasing your chances of getting approved.
Also Read: Reasons You Should Set Up Your Two-Wheeler Loan Before Visiting A Dealer
Conclusion
With more and more people preferring personal mobility over public transportation, two-wheelers are quickly becoming a necessary requirement. By getting pre-approved for a two-wheeler loan, you can buy the two-wheeler easily. Furthermore, you also get the benefit of negotiating the terms of the loan as per your convenience.
