Should You Go in for Pre-approved Home Loan?

Finance by  Mashum Mollah 29 May 2019

Home Loan

A pre-approved home loan is like a regular home loan. The pre-approved loan amount depends on the creditworthiness and income of potential borrowers. Suppose your monthly income is Rs.50,000. You are a potential buyer with a good credit rating. Based on this, the lender offers you a pre-approved loan amount. Let’s see how pre-approved loans work and if they are good for you.

How to Apply?

Some lenders may offer you a pre-approved home loan without you having to apply for the loan. But you can also apply for a pre-approved home loan to get the best home loan offers. You need only to provide some basic details such as monthly income, age, and current liabilities. Check the websites of financial organizations for pre-approved home loan offers. Keep in mind, though, a pre-approved loan is valid for a certain period of time, usually six months from the date of approval.

Advantages of a Pre-approved Loan

Pre-approved Loan

A pre-approved home loan has many advantages. These are as follows:

Fast Disbursal of the Loan Amount: As most of the document verification is done at the pre-approval stage, the disbursal of the loan is faster. Lenders only verify the property documents before giving the final approval.

Focused Search of Houses: In a pre-approved home loan, the buyer knows what amount of loan they are eligible for. This gives the borrower the time to search for the best home. For instance, if your pre-approved home loan amount is Rs.40 lakh, you can look for a house within that price range.

Free of Cost: Most lenders offer house loan calculators free of cost. It is easy and quick to calculate the loan amount. Thus, you can compare the offers from different lenders and choose the lowest interest rate for a home loan in India.


You should also consider the following cons of a pre-approved home loan.

Terms and Conditions Subject to Change: The terms and conditions of a pre-approved offer can change eventually. Read all the loan documents carefully before accepting it.

No Certainty of the Pre-approved Offer: A pre-approved loan offer gives you no guarantee of your getting that amount. It only shows that you meet certain conditions and are eligible for that amount.

Is a Pre-approved Home Loan Good or Bad for You?

Home Loan

Arranging funds for buying a residential property is challenging. Hence, a pre-approved home loan can be a boon. Using an online house loan calculator, you can even calculate the loan amount before even applying for a loan. A homebuyer can gain confidence from a pre-approved home loan.

But the opposite is equally true. A pre-approved home loan can spoil your ideal choice of a home. Also, since the loan is at the pre-approval stage, you may face some decision-making problems.

So, keeping all the points in mind, a pre-approved home loan will come in handy if you do the following before applying for a loan:

  • Narrow down your search for your ideal home.
  • Calculate the funds required.
  • Now check various pre-approved loans to compare the best home loan offers.
  • After the final approval of the loan, you will be in a position to finalize the purchase of the house within the tenor of the loan.

Final Word

Besides banks, many non-banking financial companies (NBFCs) offer home loans up to Rs. 5 crores with tenor up to 20 years. You can also get a top-up loan of Rs.1.75 crore or below. So, owning an apartment in the dream complex is no big deal now.

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Mashum Mollah

Mashum Mollah is an entrepreneur, founder and CEO at Viacon, a digital marketing agency that drive visibility, engagement, and proven results. He blogs at

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