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Busting Some Common Misconceptions And Myths Relating To Personal Loan

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Are you one of those individuals who wanted to explore personal loans but were hesitating due to myths and the misconceptions going around? Many individuals apply for a somewhat tricky loan option just because they feel like a personal loan will be risky.

So to clear all those misconceptions, we've listed out some basic myths going around below:- 

1) You have to be a salaried person to get funds from a personal loan.

2) You can't apply for a personal loan if you have a bad credit score.

3) Only government and private banks provide the facility of personal loans.

4) The interest rate charged for personal loans is very high.

5) The entire documentation process of a personal loan is very time-consuming. 

Let's bust each myth one by one:- 

You have to be a salaried individual to get funds from a personal loan

Banks need some security while approving the application of a candidate. They check whether the candidate is employed and is financially capable of repaying the loan amount along with the interest rate. So it's essential to be either a salaried or a self-employed individual to get your personal loan application approved. The applicant doesn't necessarily have to be only salaried. Even self-employed individuals can apply for this loan facility. However, if you're unemployed, then banks will definitely reject your application. You should have a minimum work experience of at least one year in your profession. You can use tools like a personal loan eligibility calculator to check your eligibility. 

You can't apply for a personal loan if you have a bad credit score

Your CIBIL score is a three-digit score that determines whether an applicant is creditworthy or not. A good/decent credit score of 750 and above will help you to get your application approved instantly. But a lot of individuals feel like if they have a bad credit score, then banks will reject their application. So for the term 'bad', there are two categories. If you're an individual who has a credit score of 650 to 750, then there are some banks that will accept your application, but they'll charge you with a high-interest rate. Whereas if your credit score is less than 650, then banks will reject your application. 

Only government and private banks provide the facility of personal loans

A lot of individuals think that only government and private banks can provide the facility of personal loans. But they're wrong; there are a number of NBFCs (Non-Banking Financial Companies), financial institutions and digital lenders that provide the facility of personal loans. So customers have the flexibility to compare all the lenders that provide the facility of personal loans and then choose your ideal loan option. 

The interest rate charged for the personal loan is very high

The interest rate charged for a personal loan is comparatively low and is pretty affordable. The interest rate ranges between 10% to 20%. However, you can negotiate your HDFC personal loan interest rate with your bank manager if you have a high credit score. 

The entire documentation process of a personal loan is very time-consuming

The entire documentation process of a personal loan is speedy, easy, effortless and hassle-free. You'll have to complete the application form and attach some basic KYC documents required by the bank. And that's it! Banks don't ask for a bundle of paperwork to approve your application. And the entire processing time is also significantly less. So you can easily apply for a personal loan facility from the comfort of your home and get it processed within 2 to 4 business days. 

A personal loan is the best option if you're looking to get funds without pledging any asset or security. You can quickly get apply for this loan option at any bank or NBFCs across the nation. 

 

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