There has always been speculation and the formation of stereotypes attached to personal loans. These misconceptions often deter people from considering personal loans as a viable financing option. Personal loans come in handy when you are in urgent need of funds. A personal loan is a ‘no questions asked’ kind of loan. You do not need to mention the purpose, there is no collateral and the approval is swift. Yet there are a lot of myths attached to personal loans. We are here to bust these myths and give you the right facts.
Myth 1- Only Banks are allowed to give personal loans
This is a common misconception that personal loans can only be availed from banks. There are other Non-Banking Financial Institutions and lenders who offer personal loans. You need to be vigilant enough to look out for genuine lenders who are registered with the Reserve Bank of India.
Myth 2- Online loan applications are not safe
Technology has paved the way for applicants to now apply for personal loan online. Online portals are safe and secure. They save loads of time and also give you the chance to get instant disbursals. Almost all banks and NBFCs have their own online portals for availing a personal loan and they vouch for the best level of security. This way you can get an instant personal loan and save on the hassle of visiting the lender’s branches. Personal Loan EMI Calculators make the job easy for you to calculate and plan your EMIs accordingly.
Myth 3- The interest rates for personal loans are unfairly high
The personal loan interest rate is one of the reasons why many borrowers shy away from availing personal loans. The rate of interest for your loan depends on factors such as your monthly income, employment status, credit score, payment history etc.
Myth 4- A personal loan can only be used for personal reasons
This is one common myth which needs to be busted. A personal loan can be used to serve any kind of lawful purpose, personal or not. Whether it is revamping your house, paying for your child’s education, to pay off another debt or put towards your business, a personal loan can help you out in any kind of financial emergency.
Myth 5- You cannot take another loan if you already have one
There is no such written rule that you cannot apply for a loan if you already have one. Your second loan application can either be approved or rejected based on your repaying capacity keeping in mind your existing loan, but you can definitely apply for a loan when you are repaying an existing one.
Myth 6- Only Salaried Professionals can get a personal loan
In India, salaried professionals, self-employed entrepreneurs and also NRIs can avail a personal loan.
Myth 7- You cannot use personal loans to repay other debts
There are times when paying off a lot of debts gets difficult and there is no smooth workaround for the same. In such cases, you can a personal loan can help you pay off the debts all at one interest rate.
These busted myths prove that all you need to do is the right amount of research and not fall for such rumors. Personal loans are an easy option for someone who is in need of urgent funds. Banks and NBFCs have made the process easier. They also offer services such as a personal loan EMI calculator, interest calculator etc, to help you plan your loan application efficiently.