In a medical exigency, accessing funds is often key. Rising cost of healthcare, along with a high medical inflation rate, estimated between 12-15 per cent a year, can cause distress. Lack of adequate health cover often leads families to depend on personal loans.

Waiting for approval with no clarity on eligibility can compound anxiety. Pre-approved personal loans, in such scenarios, are of huge value, enabling faster access to credit without much documentation.

How such loans help

Banks and NBFCs offer pre-approved personal loans, usually to existing consumers. Funds in these cases are credited within hours, often instantly. Pre-approved offers remove process friction via pre-assessed eligibility checks and enable credit certainty, seamless digital processes and shorter disbursal timelines.

At the same time, it aids borrowers avoid borrowing from informal sources, choose costlier options such as a loan on a credit card.

Borrowers get upfront clarity on the sanctioned loan and terms and conditions enabling more informed decision-making. This helps avoid chaotic borrowing, a financial trap that borrowers must avoid.

Interest rates on such loans based on prior credit assessment and borrower profile. It is usually offered to select customers of lenders, often at a more competitive pricing aligned with demonstrated creditworthiness.

Responsible utilisation

While emergencies call for immediate action, you should also exercise caution when taking a loan. A couple of things must be closely considered; first, thoroughly assessing your needs and second, borrowing as per your need and not your approved limit.

Assess repayment capacity realistically, taking into account current obligations and income stability before accepting any offer.

Equally important is understanding the total cost of borrowing. Processing fee, late payment levy, prepayment or foreclosure charges are some of the important charges adding to the total cost of the loan. Check with banks and NBFCs with whom you have an existing relationship for pre-approved offers, compare and pick judiciously.

Another aspect to consider is the loan tenure. A shorter tenure raises EMI compared with a longer tenure; however, with a longer tenure, the total interest outgo is more than the former. You should always choose a repayment structure that aligns with your financial capacity and cash flow.

There have been increasing instances where consumers in need of immediate funds have borrowed from poorly regulated/unregulated platforms, only to find themselves in a debt trap of high-interest loans, or, in some cases, exposed to fraudulent practices. To avoid falling prey to such scenarios, always borrow from RBI-regulated entities such as banks and large NBFCs.

Pre-approved personal loans, when used judiciously, complement savings by providing standby liquidity without friction. The objective is not to encourage mindless borrowing, but to enable informed, disciplined action when circumstances demand it.

(The writer is CEO of Paisabazaar)

Published on March 9, 2026