Busting the 6 common myths about the personal loan

A personal loan can help you to get rid of any cash crunch. Hence getting a personal loan can be the best way for anyone to fund any emergency expenses. A personal loan can be avail easily with no collateral as this type of loan is an unsecured loan and requires minimal documentation.

You can get the approval of a personal loan instantly due to advancements in technology. Therefore your loan will get the funds into your account with no hassle. However, there are some myths about personal loans among the people that are stopping people from availing of their benefits. In this article, we will bust all the myths of the personal loan as they hamper one decision to apply for such a loan.

Here are the list of some of the misconceptions about the personal loan that caused apprehension among the individual loan applicants:

1. Personal loans have a high-interest rate

Most people think that you don’t have to provide any collateral to get a personal loan due to the interest rate. This, however, is not always the case. Interest rates are usually determined by the ability of people to repay and their credit scores. Individuals with a limited repayment capacity are typically given loans with higher interest rates. Borrowers with a strong credit score and a solid payback history can acquire a personal loan with an interest rate as low.

2. Taking a personal loan can affect your credit score.

Most people think that taking out a personal loan can affect their credit score, and there will be a downfall in their credit points. This is not true because this type of loan won’t affect your credit score much like any other form of credit. However, you must make your payments on time to increase your credit, and if you miss making the payments, it can damage your score.

3. Individuals with high salaries only can get a loan.

One of the common beliefs people have is that an individual with a good salary can only get a personal loan. However, lenders and financial institutions can provide loans to the salary people and even to self-employed and business owners. But you must have a good credit score and history to avail of the loan.

4. A personal loan requires collateral.

You must know that personal loans are unsecured loans, and hence you don’t have to submit any collateral. To get a personal loan, you have to submit minimum documentation, so availing a personal loan is quick and hassle-free.

5. The processing time of the loan is also high.

The most common misconception about the loan is that the processing time is too large and the approval process is too tiresome. Until the past few years, this has been true, but everything has been done more quickly because of technological advancements.

You can now get your loan disbursed in your account within 24 to 48 hours after submitting your application. Application forms must be completed online and required documents uploaded, which only takes a few minutes and can be done online.

6. Personal loans can be avail only at banks.

One prevalent personal loan misconception is that personal loans are exclusively available from banks. Many non-bank financial companies (NBFCs) and digital lenders provide personal loans with more flexibility and less stringent loan approval standards than banks. If a bank rejects a loan application, NBFCs, with their specialized and diversified lending offers and a better likelihood of acceptance, may be able to help.

You can even get a personal loan at minimum documentation from Buddy Loan. They are one of the best loan aggregators in India that provide hassle-free loan processes.

Conclusion

When you know all the myths about personal loans, you can apply for a personal loan online without fear or hesitation. However, you must remember never to use the amount more than required for all your needs. So now avail a personal loan in just a few seconds and enjoy life without stress.