Misconceptions on Personal Loan

Misconceptions on Personal Loan

Feb 5, 2024 | Personal Loan | 0 comments

People often fear off taking personal loans considering they are expensive loans and very difficult to payoff. However, they are easy loans which could be easily entertained by banks and other financial institutions and help you meet your urgent financial needs.

Let’s look at various myths and misconceptions that are associated with Personal Loans and look at what is the actual reality is.

Personal Loans are one of the most expensive loans available

Yes, since the personal loans are easily available loans they come at a cost which is higher when compared to home loans and car loans however they are much cheaper than your credit cards.

Personal Loans come at a cost of 11% to 18% however your credit card loans come at a cost of 13% to 23%.

Hence if you intend to pay off your credit card by more than one month, it’s advisable to take a personal loan in place of paying off your expenses on credit cards.

Only Salaried people can get personal loans

This misconception is not true. All you need to take a personal loan is a proof of steady income.

Even business men and self-employed personnel’s can get personal loans very easily by showing the proof of steady income into their account. Even NRIs can apply for personal loans in Indian Banks.

Also, in case you have an income from any kind of leased or rented property, then also you can apply for personal loans.

Personal Loans come with a long tiring procedure of getting approvals.

These days this have changed. You can get a personal loan within 24 hours with your operating bank and even other financial institutes can sanction your personal loans quite early once you have submitted all your papers.

Also, you can these days have personal loans at quite a low-interest rates from various privately operating financial institutes.

However, it’s good to do your research, as this could be quite dangerous sometimes and rather one should opt for safe loans.

You require a good credit score to get personal Loans

Well, a good credit score means more chances of getting a personal loan however, it’s not true that if you don’t have a good credit score you cannot take a personal loan.

Many banks these days provide personal loans even when you don’t have a good credit score after considering your pay back power.

However, if you already have other loans and interests to be paid off every month, then that may impact your pay back power and then a bank may reject your personal loan application.

You need a collateral to get a personal loan

This is the biggest myth about personal loans. Personal loans are cheaper than credit card borrowing and can be sanctioned with a proof of regular income without giving any collateral against it.

However, pledging a collateral means your interest rates will be lower than compared to general personal loan based on your salary cheques.

Getting a Personal Loan means you don’t have money

This is not true. Often, we don’t want to break into our investments and want to payoff some of the urgent expenses like a holiday in abroad or buy some luxury item. The personal loans come into play.

They help us pay our expenses into an equated monthly installment which we can easily from our salary credits.

However, we should not depend too much of personal loans as they could be a monthly burden and we would never be able to enjoy our full salary credit for quite a long period.

Personal loans are easy loans to help us with our urgent needs of cash and expenses without having to pledge any collaterals. A wise man would be able to use it to his profit.

You must plan your payouts before taking your personal loans or talk to some financial advisor who can advise well and also suggest some low interest personal loans options.

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