home loan pre approval

Searching for home loan offers is a common tendency among prospective property buyers. To find a suitable offer, you can compare the different home loans before buying a dream home. But do you know that many financial institutions offer pre-approved home loans?

A home loan applicant can explore pre-approved home loans. So, what exactly is a pre-approved home loan? Let’s learn what pre-approved offers are, along with other essential information. 

What is a Home Loan Pre-approval?

In simple terms, a pre-approved home loan refers to a loan offer the lender is ready to furnish to a borrower even before application. Generally, when a bank or a NOn-Banking Financial Company (NBFC) attains sufficient trust in a borrower’s repaying capacity, they approach them for these opportunities. It is provided based on income, credit history, and financial situation.

When a lender sanctions you on a pre-approved home loan, you do not need to follow the regular process involving elaborate paperwork. Instead, you receive a personalised notification on your phone previously used to register on the lender’s platform.  

How to Apply for Pre-approved Home Loans?

You can check whether you are eligible for a pre-approved home loan by visiting the bank’s online platforms (website or app) with which you have an account. Based on your creditworthiness and financial position, banks offer you loans up to a certain amount and for a set tenure. 

Generally, these loan offers are listed under the heading ‘Loan offers’ or a similar heading. A bank may have multiple offers for you, and all those you are eligible for will be listed on a bank’s platform where you are a customer.

Once you find something that you like the look of, click apply, and following a couple more simple steps, the loan is disbursed into your account. 

Documents Needed to Apply for a Pre-approved Home Loan

Usually, only a few documents are asked for pre-approved loans, as banks already have all the essential information. However, that may differ from one bank to another. Some banks may have a policy of asking for documents, so to be on the safe side, keep these documents handy if you are a self-employed or non-salaried individual:

  • Business address proof papers
  • Income tax returns for the previous 3 years
  • Profit and loss account, along with the balance sheet
  • TDS certificate 
  • Form 16 (if applicable)
  • Trade licence 
  • Qualification certificate (applicable for non-salaried professionals like lawyers, doctors, C.A., etc.)

However, if you work as an employee, the documentation list varies considerably. It comprises:

  • Past 3 month’s salary slips
  • Income tax returns for the previous 3 years
  • Bank statements for the most recent 6 months
  • A bank cheque 
  • Form 16

Things to Know Before Applying

Apart from knowing the present home loan interest rate, you should know the following before applying. This covers:

Terms and Conditions

Lenders try to highlight only the most attractive benefits while pitching their pre-approved home loan offers. Avoid getting convinced by the terms of the first lender you encounter without proper market research. Then you are most likely to miss crucial clauses. 

Thus, spending adequate time studying before obtaining a home loan is always recommended. Consider thoroughly reading the terms and conditions section to know the guidelines and regulations involving prepayment, penalties, etc. A combination of these two actions will ensure a well-informed purchase. 

Validity Time

While offering a pre-approved home loan, the lender may fix a window of usually 3 – 6 months only. If you wish to make the most of this opportunity, you must apply for the loan within this timeframe.   

The Property List for Which the Loan Amount Can Be Disbursed

Lenders usually issue home loan pre approval only for projects meeting specific technical and legal requirements. The loan offer might be turned down if you choose a property that does not meet these set requirements. Hence, only apply for a pre-approved offer if your choice meets the set standards.

So, carefully check the provided norms and select a property accordingly.

Advantages of a Pre-approved Home Loan

  • The Loan Gets Processed Quickly

With pre-approved loans, your loan gets processed quicker than when you apply for it in the usual ways. 

  • Interest Rates Are Attractive

Since pre-approved loans are only offered to select customers with good credit history, you get the best interest rates on your loans.

  • Helps in Property Search

Since a borrower knows they already have a pre-approved loan, they can search for a property in a more relaxed manner. 


Pre-approved home loans are offered to select customers of a bank. These loans don’t require too much paperwork and come with competitive rates. 

If you are searching for a property, check out any pre-approved offers you may have rather than applying for them at different banks. 

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