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8 Myths About Personal Loans That You Shouldn’t Believe

A personal loan is the most convenient and fastest way to deal with any financial crisis as it offers many benefits such as quick online approval, flexible tenure, no end-restrictions, instant access, etc. Restrictions, misfortune From, so many benefits come with many. Also half-baked theories that often mislead people about a personal loan and force them to look for more expensive ways to deal with a financial emergency.

Personal loans prove to be of great help when it comes to overcoming financial problems. Still, there are a lot of misconception about personal loans. Let's get them busted.

1 Myth : Only Banks Offer Personal Loans

Many believe that banks are the only financial institutions to offer personal loans. Yes, all banks offer personal loans but there are many NBFCs like Digital lenders like Bajaj Finserv, Tata Capital, HDB Financial Services and EarlySalary which also offer personal loans. When a bank rejects your personal loan application, you can contact these NBFCs and digital lenders for personal loans as their eligibility criteria are slightly flexible compared to banks.

2 Myth : Only Salaried Individuals Can Avail A Personal Loan

It is a very misconception that only salaried professionals with a steady flow of income can get a personal loan. Self-employed individuals / professionals such as businessmen, CAs, doctors etc. can also apply for a personal loan and the lender will evaluate their credit score and ITR before lending. Some banks also provide personal loans to pensioners.

3 Myth : Low Credit Score Leads To Loan Rejection

A credit score is one of the most important factors to determine your personal loan eligibility. However, a credit score does not completely affect your loan approval opportunities. A credit score of 750 or more is considered healthy by lenders, but if you have a low credit score (less than 750) then other factors such as your income, employer etc. can save your loan application. In such a case, the interest rate will be on the higher side but you have the possibility of getting a personal loan.

4 Myth : The Processing Time Is Long

It is believed by many that the processing of personal loans takes a lot of time and involves a lot of formalities. it is not true. These days banks are being digitalized, you can easily apply for a personal loan online and process your loan application by uploading only minimal documents. Apart from this, you can get instant approval online and this amount will be disbursed to your account within 3-5 working days.

5 Myth : Interest Rates Are High On A Personal Loan

A lot of people think that the interest rate on personal loans is high. But do you know that you can get a personal loan at a low interest rate of up to 10.99%. Yes, this is true and depends on your credit score, age, repayment history, employer, etc. In addition, interest rates on personal loans are very low compared to credit card interest rates starting at 30%. Therefore, it is always possible to get a personal loan instead of a credit card.

6 Myth : There Is No Prepayment Option

Due to the short tenure of a personal loan that typically varies from 12 to 60 months, many people believe that there is no prepayment option on a personal loan. However, you can prepay the loan before the term ends. Some banks have a duration of 6 to 12 EMIs and after paying these EMIs, you can stop the loan at any time before the end of your term.

7 Myth : Personal Loan Can Only Be Used For Personal Reasons

Personal loans come with a flexible end use that can be used for any purpose. You can invest money received from a personal loan in a business idea or you can buy equipment for the business or pay salaries to your employees.

8 Myth : You Can Apply For A Personal Loan From Various Lenders At A Time

Yes, you can apply for a personal loan from various lenders at once but this is not fair. Every time you apply for a personal loan, it is registered as a strict inquiry in the credit bureau and reflected on your credit report. If any lender checks your credit report, they will be able to look into this check and consider you to be credit hungry and therefore will not accept your loan application. Therefore, you should apply with only one lender at a time.

If any of the above myths have stopped you from taking a personal loan, now is the time. You can still take a personal loan without any hassle on and repay it in a flexible tenure. Just remember, do not borrow more than you can repay because it can lead to debt-trap and choose the appropriate tenure for the stress-free repayment process.

To Apply For A Personal Loan Through App

The process to get a personal loan through mobile application ( Download Now) is very quick. You just need to follow these simple steps from loan app.
1. Download and install the application for the further process.
2. Enter your mobile number and fill your details.
3. Upload all the valid documents for verification purpose.
4. Once your application is approved accept the terms & Conditions.

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