Some Interesting Pointers about Pre-Approved Loans that Borrower Should Know
Jun 12, 2018 Home Loan
Many people are in favour of pre- approved loans and there are those who do not prefer this kind of loans. Those in favour have their valid reasons to argue to prove their points. Such as, who wants to lose a good property because of long home loan disbursal process? Then pre- approved loans lets you understand your financial position as the bank approves the loan based on your age, credit history, financial stability, repayment capacity along with your purchasing capability. Due to the pre- approved loans, sellers take you for seriously and are more open to negotiation. Also, the overall buying process gets faster as you already have an approved loan with you.
Although these are perhaps some of the benefits of the pre-approved loans but there are certain things that the borrowers should know to avail the overall benefit of the pre- approved loans.
Although these are perhaps some of the benefits of the pre-approved loans but there are certain things that the borrowers should know to avail the overall benefit of the pre- approved loans.
Processing fees
There are certain banks that include State Bank of India, which do not charge any kind of processing fees for pre- approved loans. But most of the private banks do levy a flat fee between Rs 1000 to Rs 2000. If you don’t avail the loan within a specified time period that can be between 3 to 6 months as mentioned in the agreement of pre- approved loan, then you will lose the amount of processing fee. In such case, you have to again apply for the pre- approved the money.
Credit score
If you repeatedly apply for a loan and you fail to close the deal, then it affects your credit scored badly. And this might also hamper your plans of buying a home.
Legal angle
Banks or the financial institution will never approve loans for those properties that are involved in any legal hassles. Also, properties in the unauthorised colonies and very old structures do not get financed by the banks. So, while looking for a property check the legal angle related to the property.
Financial position
Your chances of getting the final amount depending on your financial position. In case you lose a job, then the bank might refuse to offer you the loan.
Evaluation of the property
In case of pre- approved loans, banks usually do not evaluate the loan-to-value ratio of the property as there is no property to do so. Once the property gets finalised then the banks can evaluate the property. And based on the worth of the property the banks disbursed the pre- approved loan amount. For instance, if your loan eligibility is Rs 50 lakh and your property value is much less than that then the bank might not give you the full amount.
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