A personal loan is the best financial resource that will help you tide over the financial situation. With instant e-approvals, zero collaterals and pre-approved offers, a personal loan is surely gaining an edge over the traditional lender. However, people still hesitate to apply for personal loans as there are few myths associated with the personal loan online application process and its approval. Because of these borrowers are again routed to costly or inefficient means of a credit to meet their emergency cash needs.
So, here are common myths pertaining to personal loan explained in detail:
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Poor Credit means you won’t get a loan
Although, credit score is an important parameter to determine the borrower’s credibility, however, there are many lenders out there who would consider your credit score on a slightly lower note. They won’t reject your loan application instantly. If you have a good income source and you show the lender to repayment capacity, you can certainly get your personal loan approved. It’s just that you would have to pay little higher interest rates.
You can avail loan only from banks
Gone are the days when banks where the only means to borrower finance. Today, there are numerous non-banking finance companies, peer to peer lending firms, credit unions, FINTECH companies that offer a personal loan with attractive interest rates and instantly loan sanction in 1-2 days. If your loan is rejected with banks you can approach the NBFCs, credit unions or FINTECH companies for smaller financial needs who will figure out a way and lend you a loan as per your repaying capacity and income source. They don’t follow stringent eligibility criteria.
Salary Individuals can apply for a personal loan
Again, it’s a myth that only salaried professional will apply for a personal loan. Both salaried and self-employed borrower can avail personal loan finance. Self-employed individuals with good to an excellent financial background and successful business can easily avail a personal loan. Lenders will evaluate your credit score, IT returns, cash flow and other important parameters to be eligible for a personal loan
A lot of borrowers think that personal loan comes with exorbitant interest rates and unnecessary charges. However, personal loan interest rates can be borrowed with interest rates as low as 10% for individuals who have good repaying capacity and excellent credit score. It’s just that interest rates offered will be based on your risk appetite, credibility and credit profile. Personal loans are far better compared to credit cards which might charge you anywhere between 18% to 36% annually.
Instant Loan Repayment
Borrowers think they would have to pay the personal loan instantly in a couple of months. However, you can choose a flexible tenure of around 12-60 months and make comfortable repayment of your personal loans. There are personal loan EMI calculators that will help you choose an affordable EMI option. You can stay prepared in advance and go ahead with executing your repayment in a proper way.
With online personal loan application, you can borrow finance right from the cozy corner of your homes or offices. You can visit digital aggregator sites to compare the interest rates and choose the best personal loan, saving a lot of time, energy and money!