Personal loans are collateral-free funds with zero end-use restrictions. Such loans can be availed to meet any type of expenses, be it educational, medical, travel, personal, professional, etc. But personal loans, being a popular mode of borrowing, are often subjected to several myths and misconceptions, which often end up refraining people from borrowing such a credit. They resort to rather expensive alternatives, which hold high risks of debt.
Lenders have taken such issues into consideration and made sure to assist borrowers regarding loan-related queries digitally. Online tools like online personal loan calculator can be mentioned as one such attempt.
Online assistance, as well as the tools, helps debunk several confusions surrounding personal loans. But there are plenty of other myths that have to be clarified as well.
Personal loan myths you should ignore
Some of these myths are assumptions, while some originate from misunderstanding the process. To be financially aware, you need to avoid falling prey to such misconceptions. Have a look at some of the popular myths regarding personal loans:
- Low credit score cannot qualify for personal loans- It is true that an applicant’s credit score plays an important role in the loan approval process. But it would be wrong to believe that applicant’s with lower credit scores cannot qualify for personal loans. In such cases, he or she can get loan approval based on other eligibility parameters (age, income, employment history, etc.)
- Only certain financial institutions provide personal loans- You might think that it is only Government-backed lenders who extend unsecured personal loans. This is, however, untrue. There are several NBFCs (Non-banking Financial Companies) which offer personal loans to eligible applicants. The features and benefits offered on personal loans by NBFCs are also different from those offered by banks.
- Eligibility for personal loans is unattainable- Personal loan eligibility has always been a major concern for prospective borrowers. People think eligibility criteria set for such loans are too steep to qualify. But, this again, is not true. Lenders consciously set easy to meet and straightforward eligibility for personal loans so that most individuals can benefit from it.
Borrowers can also use a personal loan eligibility calculator, a tool similar to a personal loan calculator, to find out how much credit they are eligible to borrow.
- Personal loans have exorbitant interest rates- Even after knowing how personal loan helps fulfil several requirements, some individuals step back thinking interest rates levied on these credits are too high to afford. However, the interest charged on such loans can be quite affordable. Low interest rate on personal loans can be availed from reputed institutions. If the loan affordability still bothers an applicant, he or she can enquire about the EMIs beforehand. The personal loan calculator can be accessed at all times to know the payable EMIs.
- Existing lenders cannot avail of personal loans- People often think that already holding a loan can refrain them from availing another credit. But an existing borrower can service multiple loans simultaneously. So, even if you are already repaying a loan, you can still borrow a new personal loan when needed.
There are also several myths regarding the processing time of personal loans. People tend to believe that it takes weeks for lenders to verify, approve, and disburse such loans. But personal loans are now approved within minutes and sanctioned within 24 hours*.
Different types of pre-approved offers extended by lending institutions, such as Bajaj Finserv, also streamline the process of approving and disbursing loans. These benefits can be enjoyed by borrowers on secured as well as unsecured loans. Check your pre-approved offers by entering your name and contact details.
If you have any queries regarding eligibility, EMIs, etc., you can use a personal loan calculator In case you need further assistance, you can get in touch with the concerned officials as well.