How pre-approved loans work

Typically, people turn to banks when they need financing for a project or expense. They must then undergo a review by the institution and collect a number of requirements requested by the bank. However, there is also the possibility that a bank itself will offer its clients the opportunity to get money in the form of a loan, trusting their solvency as demonstrated over time as a customer of the bank. This is known as a pre-approved loan.

Pre-approved loans provide access to financing with the shortest wait time and hardly any documentation. This does not mean that a loan is 100% approved. It means that a bank believes, from what it can see, that all the requirements are met to grant the loan. Since banks have most of the customer’s information, if a pre-approved loan is requested, wait time and paperwork will be minimal.

It’s the motivation you need to start that project, trip, remodeling project, or school, with the peace of mind of knowing that there are many ways to get quick, simple financing. But how do I know if my bank has pre-approved loans? Banks will communicate this to their customers through their online banking system or app, or by mail, text message, email, etc.

Requirements for loan

Requirements for loan

Normally, financial institutions offer these pre-approved loans to their customers alone, since the customers have been connected to the bank for a period of time and have been able to demonstrate solvency during that time. Each institution establishes its own system for offering to finance to its customers.

Those who are more likely to be able to take advantage of pre-approved loans are those who, for example, are signed up for direct deposit, have no overdrafts on their accounts, and have direct invoicing or regularly use bank cards. There is no universal formula. Each bank establishes its own requirements, but typically the more connected a customer is to the bank and the more solvency is demonstrated, the more likely it is that s/he will have access to this type of financing.