Saturday Brain Storming Thought (209) 10/02/2024
PRE-APPROVED BUSINESS LOAN (PABL)
Pre Approved Business Loans (PABL) are like regular loans, with the exception that you do not have to go through a regular application process to get them
Instead, it is the other way around – the lender is making you an offer
Pre Loan Approval
It means the lender already has an offer for you before you apply to borrow funds
Such loans are often offered to customers who have previously availed of a loan from a lender and have maintained a good track record in repayment
PABL is based on the cashflows in the account
The loan is provided for meeting the customer’s multiple requirements related to their business activity
Rejection of PABL
Reasons for declining, despite having pre-approval
1) your financial circumstances have changed
2) you switched jobs
3) your credit score has been impacted
4) the lender’s credit criteria have changed
5) the property you have chosen does not qualify for a home loan
6) the lender gave you unreliable pre-approval
7) interest rates have gone up
8) the lender found information that was not previously disclosed
PABL eligibility criteria
1) you should be between 26 to 66 years old
2) you should own a business that is at least 3 years old
3) you must have filed the tax returns in the name of the business at least once
4) decision to give PABL is entirely at the lender’s discretion
Documents required for PABL
1) Identity proof
2) address proof
3) financial documents of the business (bank statements, ITRs, and more)
4) proofs of business ownership
5) The lender may ask for additional documents, depending on your application
Features and benefits of PABL
1) flexible repayment facility
2) you can pay the interest only for the initial portion of the tenure, and repay the principal at the end
3) high loan value, may up to Rs 50 lakhs, and use funds freely
4) low interest rates
5) minimal documentation
6) dashboard access
7) quick application process
Required CIBIL score for PABL
The minimum CIBIL score for a personal loan is between 720 to 750
Having this score means you are creditworthy
Lenders will approve your personal loan application quickly
Time required for PABL
On average, it takes 7 to 10 days to get a pre-approval
Pre-approved limit
Pre-approved limit means the maximum limit up to which you are authorized to spend on your smart EMI card
The pre-approved limits are communicated to you at the time of card delivery
PABL / PABL POS
1) booster to MSEM (Micro), segment as a drop line facility
2) PABL for sole proprietors/individuals (having a current account)
3) loan amount increased from Rs 10 to Rs 20 lakhs (minimum Rs 50000)
Availing of PABL in SBI
1) go to https://yonobisiness.sbi
2) login to your business
3) Pop-up will be displayed to eligible customers
4) click on Pop-up > check the loan amount > enter details and submit
5) branch will contact the customer
6) onetime branch visit for signing the documents for sanction/disbursement of loan
Disadvantages of PABL
1) PABL may be valid for a few days asan exclusive deal, you need to act fast
2) a bank is not legally bound to sanction your loan once it proposes PABL
3) PABL only signifies loan eligibility, and not instant approval and disbursement
4) check the interest rate before accepting PABL
5) The schedule of fees and charges for PABL may differ
6) possibility of high penalty on foreclosure and partial pre-payments
Evaluation process for PABL
Lenders check your
1) credit score
2) credit history
3) bank balance
4) income details
Steps to improve CIBIL
1) clear all your existing debts
2) pay your EMIs on time
3) limit your credit utilisation
4) report discrepancies in your credit report, if any
5) borrow a mix of credit
6) consider increasing your credit limit
7) keep old accounts on your report
8) avoid showing risk
9) limit new credit applications
10) be patient and persistent
COMPILED BY:-
Er. Avinash Kulkarni
9822011051
Chartered Engineer, Govt Regd Valuer, IBBI Regd Valuer
