Personal Loan Myths Debunked

Personal loans are becoming the talk of the town becoming a viable alternative for assisting individuals and firms in times of financial need. Personal loans have many benefits to tackle any emergency. For a short-term personal loan or a long-term one, you need to pay the interest rate, then you have to make sure everything is with your bank like tenure, interest rate, and flexibility. Personal loan has many advantages and disadvantages too, but these days some myths related to them are becoming a matter of concern among people which prevents individuals from borrowing them, some of them are not true at all in these fast-paced times. We have prepared a list of those debunked myths related to Personal loans. 

Let’s read all the steps carefully and get rid of misconceptions:

Personal Loans Have Lengthy Processing Time

Long and troublesome processing and loan amount disbursal time is a matter of bygone days. Today, we get the complete online process for most of the activities while taking a loan, ranging from quick application procedure to processing. Personal loans need very little documentation with quick approval procedures. Now, you can easily get quick processing and the verification process is also efficient and fast. 

Higher rate of Interest 

Personal loan interest rates are indeed higher than secured loans like car loans, home loans, business loans etc. Some lenders and banks offer good interest rates to a good credit score-holding person. The rate of interest depends on several other factors like your source of income, employment, relation with your lender or banking institution, and many more. So, the concept of higher interest rates in personal loans every time is wrong. You should check the rate of interest whether you are borrowing a short-term personal loan or a long one. 

Can’t Borrow Money With Low Credit Score 

Banking institutions check for the creditworthiness of a particular individual to see whether the person is eligible for the loan or not. With the credit score, they verify the past financial status of the individual. However, a good credit score is needed to take any type of loan but a low credit score won’t lead to the rejection of your loan application. Many banks and lenders provide loans for low credit scores. Therefore, if you easily manage your credit score up to 750, with a good income source and have a healthy relationship with the lender, you can easily borrow loans at reasonable interest rates and even on low credit. For all your queries, contact your banking authority or lender. 

Only Salaried Professionals Can Apply for the Loan 

There is a myth that only a salaried person can apply for a loan, but it’s not true. If you are a businessman, consultant, contractor, or have farms and have any sort of income source, can apply for a personal loan. You just, need to fulfil the eligibility criteria and basic formalities for getting a loan. You must have more than 20 years of age, and credit score of 750 or above. 

Personal Loans Can Be Borrowed If any Loan Exists

Your banking institution and lender consider the status of your finances by verifying existing loans and other credits. They check for the creditworthiness for this task, but they can’t deny you for taking a personal loan. If your lender or the bank is satisfied with your income and you can repay your debts on time, you will get a Personal loan easily. For more details, you can check the eligibility criteria and other details. 

Long Documentation Procedure 

Only secured loans have lengthy documentation procedures, but if you are applying for a personal loan, you won’t be asked for such requirements. Just, some documents you have to submit like credit score, bank details, your home and permanent address, and so on. These things make the personal loan, one of the best options to deal with emergencies because you need instant funds while you are stuck in any sort of problem like medical issues, home renovation, wedding event, or planning for a long vacation. 

Summary 

Personal loans are very helpful these days because they offer you a viable option to handle emergencies, but there are rumours amongst people about personal loans. It includes personal loans for salaried people only, taking lengthy approval process, can’t apply at low credit and many more. These are misconceptions of people who need to be exposed to the facts. A personal should check the eligibility and other details while taking a loan for their needs. For more assistance, you should contact your banking authority or lender to make sure that you are eligible for the personal loan or not.