Myths About Personal Loan

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What is a personal loan? 

Before learning about all the myths, let's first start off by knowing about a personal loan. It is an unsecured loan that can be availed immediately in times of need. You don't need any asset to pledge it as collateral to get funds from a personal loan. You can quickly get your loan application approved if you have a decent credit score.

Your credit score plays a significant role in determining whether or not your application will be approved. If your credit score is high, then banks will quickly approve your application, and you can get a lot of benefits like high personal loan interest rates. However, if your credit score is bad or low, then your application will either be rejected or you will be charged a high-interest rate. It's essential to maintain a decent credit score.

Myths about personal loan

There are a lot of myths about personal loans. Some of them are good, and some of them are bad, so to be clear, let's get to know more about those myths and let's check whether or not they are true. 

  • Approval Process:- There are myths regarding the personal loan that the application and approval process of the loan is very long. So let me tell you that this myth is completely wrong. You can easily get your loan application filled and approved within 2 to 5 business days. You don't have to wait for months to get your loan approved, unlike any other loan.

  • Banks:- A lot of people think that only banks provide personal loans to customers. This myth is entirely wrong. A lot of lenders like NBFCs (Non-Banking Financial Companies) like Tata Capital, Bajaj Finserv, etc. that provide personal loan facilities to their customers. So if the banks reject your personal loan application, then you can contact these NBFCs and apply for a personal loan according to your eligibility criteria.

  • Credit Score:- There is a myth that you can't apply for a personal loan if you have a low credit score. A credit score is a significant variable to determine your creditworthiness. However, there are a lot of banks and NBFCs that accept individuals who have low credit scores. They do charge high-interest rates and other charges, but they provide personal loan facilities to those in need of immediate funds. It's advisable to maintain a good credit score to avoid any problem while applying for a loan. 

  • Employment status:- The myth is that only salaried individuals can apply for a personal loan. It is essential to be employed in order to be eligible for a personal loan, but any employed individual, whether salaried or self-employed, can apply for a personal loan. You can be a self-employed doctor, CA, or a businessman, and it doesn't matter. The thing that matters the most is that you have appropriate documents to prove your profession. You can submit documents like ITR or tax returns to verify your self-employed business. 

  • Interest rate:- A lot of people think that the interest rates that are charged by the bank on personal loans are very high. But the interest rate usually differs from one bank to another. Interest rate is the extra money that is taken by the bank in order to give you a loan. There are a lot of banks and NBFCs that provide personal loan facilities at the lowest interest rate to the customers. For example- SBI personal loan and Canara Bank. So if you are looking for banks that provide low-interest rates, you have to compare all these available choices in the market. 


Conclusion:- 

These are all the common myths that are believed by a lot of people. So if any of the myths that we have mentioned above has ever stopped you from applying for a personal loan, then here is your answer. You can easily apply for a personal loan without any hassle and a stress-free repayment process. 

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