A ready reckoner on pre-approved home loans

Apply for Instant home loan and plan for a dream home that suits your budget.

Have you ever received a call or an sms from a bank or a financial institution stating that you are eligible for an instant home loan? If so, then you belong to the privileged few who have been selected for a pre-approved loan even before you have finalised a property. In this article, PNB Housing explains the merits of pre-approved home loans.

A pre-approved home loan is an in-principle offer from a lender granting you a loan of a specific amount and may be at a special interest rate. It gives you a head start over those who have to first scout for a property and then approach a financial institution for home loan. It is, however, important to remember that the offer is usually valid for a certain period. At PNB Housing, this term usually varies from three to six months. Terms and conditions such as EMI, tenure and interest rates are subject to change during this period.

You can also apply for a quick approval on your home loan through PNB Housing’s Instant Loan facility by clicking here.

Unlike a home loan that you apply for after choosing a suitable property, a pre-approved loan is offered to you basis your income, financial position, and credit history or creditworthiness.

A pre-approved home loan helps you decide the right price-range for the property you plan to buy. The loan is disbursed after you have identified the property, and fulfilled the financial institution’s legal and technical requirements. For example, if there is a dispute over the property title, the lender may not disburse the loan until the issue is resolved.

A pre-approved home loan has many benefits. Some of these include:

Planned budget: With a pre-approved home loan, you will know exactly how much funds you have and how much more you need to arrange or borrow. It also helps you to decide on the extent of down payment against the property and the EMI tenure.

Focused search: Once you know that you are eligible for loan for a specified amount, you will have more time to look for a property that fits your budget and in a location of your choice. This saves both time and effort.

Faster disbursal: Since the bank or the financial institution has offered you the home loan, it will speed up the verification process and ensure quick disbursal of the loan. This is particularly helpful if the property transaction has to be carried out within a specific time.

Before you opt for a pre-approved loan, you need to keep two important factors in mind— read all the terms and conditions mentioned in the sanction letter carefully before taking any disbursal to ensure that you can meet them without any hassle; and take note of the rate of interest offered as it is usually floating is nature, hence can change by the time the disbursement takes place. Do check the final interest rate being offered once you finalise the property.

As mentioned earlier, a pre-approved home loan is only an in-principle offer and does not guarantee automatic disbursal of the loan. The financial institution will honour its commitment after carrying out due diligence, which means you have to meet the institution’s guidelines for home loan. Once you do so, you will have no fear of the loan being rejected and you can go ahead and make plans for your dream property.





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