Personal loans are one of the most common ways of bridging the gap of financial requirement. The credit availed from the personal loans can be availed for meeting wedding expenses, travelling cost, renovation and various other purposes. Thereby, apply personal loan online and it is safe.
Myths and folklore are attached almost to everything, the gossip and rumours make for myths which are commonly assumed as the gospel. Today we will try to dissuade some of the common myths associated with the credit option known as Personal loans. Read the article to find out some mind-boggling myths disguised as the facts.
1. None other than banks offers personal loans.
One of the commonly circulated myths is only banks provide personal loans, but this doesn’t stand. In fact, Personal loans are provided by non- banking financial corporations and digital lenders. So, if the bank rejects your personal loan application, then you don’t need to be dejected to think that all the doors of credit are closed. Instead, NBFCs and digital lenders are the right places you should look out for.
2.Lower credit score boils down to a rejection of personal loans
The oft-quoted line is, ‘ if you have a low credit score then nothing can help you to get the personal loan. However, it’s not true. There is no denying the fact that the credit score is important and a score of above 750 can help one to reap good deals on loan. But individuals can still easily get the personal loan when their credit score is below that 750 marks. Banks, NBFCs and the digital lender may consider an individual’s income, employment status and several other factors to provide a personal loan.
3 .A personal loan is only for salaried individuals
Nothing can be far from the then that the personal loans are only for the salaried individuals. Personal loans are also available to professionals like doctors, CA, Lawyers and others. Further, the personal loans are also available to pensioners.
4. Personal loans can only be used for personal reasons.
Personal loans can not only be used for renovations of homes, weddings and a variety of personal reasons but it can also be used for purposes other than personal reasons provided it is legal. Credit from personal loans can be used for financing equipment.
5.NO prepayment option is available
Usually, the tenure of the personal loan is short, unlike the home loans, so most people believe that there is no option for the prepayment for personal loans. However, individuals can foreclose the personal loans as most banks provide the options of the foreclosure.
6. Personal loans always involve high-interest rates
Personal loans are one of the most lucrative credit options, but the allure of the personal loans fades away due to the high rate of interest charged on them. However, unlike the popular opinion, personal loans can also be availed at the lower interest rate, which depends on income, credit history and other factors.
7. The processing time is long
It is commonly assumed that the processing time of a personal loan is too long, and there are a lot of formalities involved. However, this is farther from the truth. These days with banks being digitized, one can easily apply for a personal loan online and can process loan applications just by uploading minimum documents in a matter of days.
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A personal loan is a short or medium-term unsecured loan which helps the borrower in meeting the current financial needs. An individual is not required to pledge anything in the form of collateral while availing a personal loan. An individual can obtain a personal loan up to Rs. 25 lakhs, and it has a flexible tenure of upto 60 months. Personal loans are required for financing travel, debt consolidation, renovating the house, to meet the medical expenses, financing education and in case of unforeseen circumstances or several other purposes.
Myths are associated with almost everything, let us bust some common myths associated with personal loans.
- One of the commonly circulated myths is only banks provide personal loans, but this doesn’t stand. Personal loans are provided by non- banking financial corporations and digital lenders.
- Oft quoted myth is personal loan is only for salaried individuals but
Personal loans are also available to professionals like doctors, CA, Lawyers and others.
- Personal loans can not be availed for personal reasons, but it can also be used for purposes other than personal reasons provided it is legal.
- One common misconception is there is no option for the prepayment for personal loans. However, individual can foreclose the personal loans as most banks provide the options of the foreclosure.
- People believe that banks always charge a high rate of interest on personal loans, but personal loans can also be availed at the lower interest rate, which depends on income, credit history and other factors.
6. Most people believe that the processing time of personal will be too long, but things are not as they appear. In fact, one can easily apply for a personal loan online and can process loan application just by uploading minimum documents in a matter of days.