13th June 2024

10 Personal Loan Myths You Shouldn’t Believe

Be it a financial emergency or funding an important goal, we can find ourselves in a variety of situations in which a personal loan might be the ideal financial solution. These unsecured loans are simple, easy-to-avail online and available at competitive personal loan interest rates.

However, many borrowers still remain unsure due to the common personal loan myths that have persisted through the years. To help better understand the many benefits presented by these loans, let us dispel ten common myths about them:

10 Personal Loan Myths Debunked

  1. One of the most common myths about personal loans is that they are only disbursed by banks. In truth, these loans can be availed from a variety of financial institutions at lucrative personal loan interest rates.
  2. Another common myth about these loans is that they take an extremely long time to process. In reality, personal loans have become easier and quicker to avail than ever before and their application and disbursal process can even be completed online.
  3. There is also a common myth that states that personal loans can not at all be availed by individuals with a low credit score. While credit score certainly plays a part in your application, a lender might still approve your loan on the basis of various other factors.
  4. Related to the myth mentioned above is the myth that personal loan eligibility criteria are really difficult to meet. Actually, these personal loan eligibility criteria are generally quite simple and designed to serve the financial needs of a variety of individuals.
  5. A popular myth is that while unsecured, these loans always come at high interest rates.  The truth is that personal loan interest rates can be far more affordable than other forms of unsecured loans as well as the rates of various credit cards.
  6. Some people also believe that having an existing loan can affect your personal loan eligibility and make you ineligible for personal loans. However, this is not the truth. Lenders primarily concern themselves with the repayment capacity of the borrower, so having an existing loan does not disqualify you from applying for these loans.
  7. Another common myth states that only salaried people with a steady source of income are eligible for personal loans. In fact, these loans can be availed by a variety of self-employed individuals and many of them are even customized to meet their specific requirements.
  8. The tenure for personal loans is short, leading many to believe the common myth that they don’t offer options for prepayment. This is not the truth, as various lenders allow for prepayment of the loans as per the convenience of the borrower.
  9. Certain borrowers are discouraged by the common myth that availing personal loans can be a hassle with extensive paperwork. The truth is that these loans are aimed at minimizing paperwork and even allow you to submit your entire documentation online.
  10. The last personal loan myth we will debunk here is that they cannot be availed by Non-Resident Indians. In truth, many of them can easily be availed by NRIs to meet their various financial needs.

If you are seeking a loan to fulfill your financial requirements, consider choosing from the wide range of personal loans on offer in the market. There are a number of unsecured personal loans that can offer high loan amounts and flexible tenure options, making them ideal for borrowers of every kind. You can also determine your ideal EMI amount by making use of a personal loan EMI calculator, a digital tool easily available online.