Have you received an email or message from your bank that you have a pre-approved personal loan offer of a certain amount? Well, this is a standard message which the bank officials or their online tools send to their customers.
Most of us must have come across a jaw-dropping message where we are told that the loan amounting to say ₹30 lakh can be availed in next 15 minutes. “Receive money in your bank in 10 minutes”, or “Get money in next 5 minutes”.
This is a standard template of most large banks which have been pushing the envelope to raise their credit growth so much so that the deposits are barely able to catch up with the pace.
At 80 percent, the credit-deposit ratio is at its highest since 2005 from when this ratio is available, data from the RBI showed.
Read this Livemint article for details.
Meanwhile, while the banks were improving their loan book, retail customers who receive a tempting “offer” tend to believe that they deserve to get this loan. In other words, they might believe that they can easily afford to pay this loan since the bank gave this offer.
However, nobody knows about the affordability of loan repayment better than you.
Key differences between eligibility and affordability.
1. Eligibility is what banks can offer based on the customer’s profile and credit score while affordability is very subjective. You may have other financial commitments at present or in the near future which your bank may be totally clueless about.
2. Eligibility is based on the meeting of certain criteria such as monthly salary, submission of documents, authentication, and so on. Sometimes, banks extend a loan offer because you have never taken a loan before.
But once you apply for the loan, the bank typically would carry out some checks on your profile, failing which the offer may get withdrawn.
If you decide to opt for any offer for which you are eligible, make sure that you have considered the following factors:
3 Association with another bank: At times, you may already have taken a loan from another bank about which this new bank is unaware. Therefore, you should ideally overlook any such offers that you tend to receive from a bank or financial institution with which you are not regularly associated with.
(Note: Raising a loan comes with its own risks. So, due caution is advised)
