What does a pre-approved loan mean?

Citizens, who have applied for a loan in a financial institution, and with it a package of necessary documents, usually receive a message that the application has received preliminary approval. Everyone cannot understand what the pre-approved loan in means; because this does not mean that the bank can withdraw money.

Such a message is a notification to the potential borrower that the submitted documents have been verified, there are no questions from the lender, and this allows you to proceed to the next step in the loan registration process.

What does “pre-approved loan” mean?

You should be aware that this type of message does not imply a hundred percent approval of a loan issued by a bank. The client’s solvency is controlled at various stages, so one of them can be rejected.

When you send an application for a loan over the Internet, you can almost immediately receive a message to an e-mail address or SMS, the text of which contains these words. The final decision by the bank will take place later. But the fact that the loan was approved at this stage allows the client to have hope for a successful outcome.

When can they refuse after prior approval?

Many borrowers are worried about the question; if the loan is tentatively approved, can they refuse to issue it? This possibility exists. This usually happens if a person could not submit all the required documents or provided false information about him/her, as well as if his/her credit history is corrupted.

If the documents are provided in full, the information does not cause suspicions and doubts among bank employees; the client’s application will most likely be approved.