Do You Believe Any of These 4 Personal Loan Myths? Many times, oft-repeated myths assume the status of facts. As these myths gain traction, a lot of people unsuspectingly lap them up. When we are being drowned in so abundant information, it’s not uncommon for myths to pass off as absolute truth. It’s crucial to debunk these myths timely so that people get accurate information and are not misled. We all require personal loans for a lot of purposes, ranging from home-repair, purchases or taking care of financial affairs. Whatever maybe one’s requirements, financial loans have become a go to option for most people. While seeking personal loan has become easier than ever, there are still a few myths that persist and misinform people. Believing in myths may deter them from going for personal loans and look for another alternative that may not be as safe as reliable. Here are 4 most common personal loan myths that people fall for:-
1) Personal loans are unusually expensive
This is one of the most widespread myths about personal loans. The truth is that with a vast number of lenders in the market, the interest rates are competitive and subject to factors like your income, past repayment history, CIBIL score and relationship with the bank. With a steady source of income and a good track record of settling previous dues, there are high chances of a loan sanctioned at a comparatively low interest rate. Long association with the bank where you have applied for loan, also plays a role when it comes to interest rates. Those with a CIBIL score more than 750 can easily get a higher loan amount approved at a competitive interest rate. While those with a score between 700-749 are likely to get the loan, but not other benefits and a lucrative interest rate. That’s why maintaining a good CIBIL score helps in the long run. The interest rate that’s levied on personal loan granted to trusted customers with high CIBIL score can even be lower than the interest on a car loan.
2) Personal loans only for those with superb credit score
This again, is not true at all and is a myth that’s routinely circulated. While those with excellent credit scores are entitled to relatively lower interest rates and higher borrowing limits, it doesn’t mean that others are barred from seeking personal loan. Those with a low or average credit score, will be eligible to seek a loan but at a higher interest rate. In case of those who are looking for refinancing other loans, the deal could turn out to be worth it. For example, if there are already multiple ongoing loans against a person at a relatively high rate of interest, then the personal loan that he seeks for help with repayment of the others, may offer more benefits. Lenders don’t prohibit borrowers with low credit ratings, just that they are expected to shell higher interest rates. Personal loan eligibility doesn’t necessarily depend on CIBIL score.
3) Seeking a personal loan is a complex process
Complexity is something that depends on how we approach a particular issue. When it comes to personal loans, if basic steps are followed then it’s not at all complex and daunting as it’s made out to be. While applying for personal loans, it’s recommended to get a fair idea of prominent lenders that are willing to grant you the amount and then compare the interest rates, processing fees, other benefits, terms of repayment and decide based on what looks best to you. It’s advised to collect all documents like income statement, account number etc before applying for a personal loan.
4) More than one personal loan isn’t permitted
There’s no limit on the number of personal loans, if you have the requisite income to repay the loans. Personal loan eligibility mainly hinges on income of the applicant and track record. People applying for multiple personal loans is not at all uncommon. People do require another personal loan while one is ongoing when either they don’t have the bulk sum or they don’t want to be under undue burden by parting with a huge sum at once. Based on changing priorities at different stages in life, the need for multiple personal loans arise. When it comes to loan for women, there may be other benefits.
Conclusion: People apply for personal loans for a wide variety of reasons. But it’s not at all difficult to apply for it, nor is it that only those with exceptionally good credit scores are granted personal loan. If you are looking to apply for a personal loan, Finserv MARKETS has attractive offers and competitive interest rates.