Did You Know?
We serve loans, the best way you can borrow
Personal loans are a necessity for those facing financial hardship. Whether you need money for medical expenses or personal loans to start a business, getting a personal loan is preferable to taking out a bank loan. When getting a personal loan, people often hear about the good and the bad. But they usually don’t tell you that getting a personal loan will be even worse than getting an auto loan.
Do you struggle to understand why lenders won’t provide personal loans? If so, you are not alone. Many people have the same problem. However, the reasons for this vary depending on who you ask. Some say it is a misconception that personal loans can’t be trusted, while others say it is just too difficult to get one from a lender. Regardless of the reason,
Here we have described about 15 most common personal loan myths that you should know:
The notion that having a poor credit history is required to apply for a personal loan is one of the biggest flaws about getting one. While it is true that some lenders will charge more if they can see your credit report, this is not the rule. It is critical to note that a credit score of 564 and greater is entirely different from a credit score of 99. The reason a bank or other financial institution may not loan you a loan is because you may not be able to pay it back. If you have a low credit score, clean it up before applying for a personal loan. If you do end up applying, make sure that you research the different lenders and their requirements before applying.
The idea that personal loan interest rates will be higher than bank loan interest rates is one of the biggest myths about getting a personal loan. While it is true that some lenders will charge a higher interest rate if they have been given proof that you have a higher credit score, this is not the rule. The amount of the loan and your credit score determine how quickly you will be charged interest.
Unfortunately, no law says you can’t get a personal loan from a bank. However, if you want a personal loan, you do not need to go with a credit union. A credit union is a bank with a different name that is less likely to charge you higher interest. It’s easier to get a personal loan from a credit union that does not depend much on your credit score. They may even offer a lower interest rate than a bank. You shouldn't apply for a personal loan if you can't afford it. If you can't afford the interest, you shouldn't get one. And if you can’t afford to pay the interest, it is probably better to take out a traditional bank loan.
One of the biggest myths about getting a personal loan is that you have to have a certain balance on your credit card to qualify for a personal loan. This is not the case at all. The only requirement you have to get a personal loan from a bank or credit union is having a checking or savings account with them. Provided you qualify for the loan and you are eligible. Ensure you have kept a daily balance in an interest-bearing account for the last 12 months.
One of the biggest myths about getting a personal loan is that you must pay it off in full. This is not the case at all. The whole idea of a personal loan is to give you a short-term boost to help you out during a time when you need it. As soon as you get your finances back on track, you can pay it back with the same amount or even a small bonus. All you have to do is call the lender and let them know that you want to change the terms of your loan. If you have an existing loan, they will likely give you a lower interest rate and a bigger loan to help you get back on your feet. However, this is not the norm. Most lenders will give you a better deal if you come to them with a bad credit report.
It is not true that you must be a paid employee to apply for a personal loan. You can even apply for a personal loan if you are unemployed or a student. There are no minimum credit score requirements, and you don't even have to have a credit card. There is no requirement to be a salaried employee to receive a personal loan. You can even apply if you are unemployed or a student. You do not have to have a credit card to apply. You can apply for a personal loan if you have an established savings or checking account.
One of the biggest myths about getting a personal loan is that you must put up a lot of collateral to get one. This is not the case at all. The whole idea of a personal loan is to give you a short- term boost to help you out during a time when you need it. As soon as you get your finances back on track, you can pay it back with the same amount or even a small bonus. All you have to do is call the lender and let them know that you want to change the terms of your loan. If you have an existing loan, they will likely give you a lower interest rate and a bigger loan to help you get back on your feet. This is not the norm. Most lenders will give you a better deal if you come to them with a bad credit report.
You may think that personal loans are bad for your financial health, but the reality is that you get what you pay for. People frequently believe that personal loans are bad for your financial health. However, the truth is that you get what you pay for. If a certain interest rate is set at, say, 3%, that is what that loan will cost you over the term. Paying that interest rate will be very difficult if you are on a fixed income. But for those with high incomes, paying the interest will not be a major issue because they can take out a high-interest credit card. But what if you do not have a high income and are struggling to make ends meet?
Getting a personal loan may be the greatest thing for you. Because credit cards have an interest rate of 20%, you will be glad you applied for the loan in the end. A personal loan may be your best option. Because credit cards have an interest rate of 20%, However, in the end, you will be glad you received the loan. Because once you start paying it back, your monthly income will increase, and you will have less pressure to find a job that pays more. So, if you are not comfortable with taking out a loan, then definitely do not take out a personal loan. But if you have to have money to tide you over until you can get a loan from a bank or a credit union, then a personal loan may be the way to go.
This is one of the most common myths about personal loans. The truth is that the entire loan application process takes only about 3–5 business days. You can tour the lender's facility and go over your repayment plan during that time. Once approved, you will receive a personalized loan estimate to help you better understand your monthly loan payments. The loan application process can be completed online or by phone. If you are uncomfortable filling out paperwork, you can also send your request via email. Your lender will send you a payment schedule you must abide by once approved. If you miss a payment, you are responsible for the full amount, even if you had it in your account when you failed to pay.
This is one of the biggest lies about getting a personal loan. Everyone assumes that all personal loans are bad. Even though personal loans are commonly viewed as poor, they can be beneficial in a variety of ways.
For example, you can get a personal loan to fund a major purchase such as a car or a renovation project. But most importantly, getting a personal loan is good because it will help you pay your bills on time and in full. If you can demonstrate that you can make payments on a regular basis, you will be granted more leeway when it comes to reducing your interest rate or extending the loan term.
Many people have the misconception that personal loans are only for the rich. While they may be more available to some groups, the vast majority can get a personal loan. Being realistic about your finances is the key to fighting this myth. This means you can discuss your debt repayment and budget while maintaining a healthy financial position.
Lenders require collateral to secure a loan. This could be your future paid-off house or car. While you don’t have to provide collateral if you don’t want to, it has to be a safe asset with a good market value. If you fail to keep your loan payments on time, your lender will take the asset as security and loan you the rest. This can be dangerous as it can lead to someone taking your house instead of giving it back to you in full.
Many believe they must have a large cash flow to qualify for a personal loan. This is not the case. Even if you make a lot of money, you may still qualify for a personal loan if you have been struggling to make ends meet. Most lenders will assess your ability to repay a personal loan on a cash flow basis. This means they will consider your income, expenses, and any debt you have.
The most common myth about loans is that you should always apply for one if you have an emergency. This is not the case. Some emergencies, such as a car repair or medical bill, are better left to a professional. However, most emergencies can be dealt with short-term in house. Unfortunately, many believe they can’t use a personal loan for a minor emergency. This is not the case either. You could use a personal loan to fix a leaking roof or pay your electricity bill.
Majority have this feeling that personal loans are too expensive. While interest rates will go up over time, they are reasonable and don’t increase that much above the rate at which the federal government has been hiking interest rates. The highest rate increase in the last six months was 2.6%. This is still much less than the national average of 4.4%.
Getting a personal loan is a tricky business. There are a lot of myths about getting a personal loan, and the truth is that there are some nice perks to getting a personal loan. You can get a short-term loan, easy to repay and help you get back on your feet when you need it most. Getting a personal loan is not the same as getting an auto loan. They have different terms and requirements. If you are interested in getting a personal loan, use the tips provided in this article to help you better understand the process. When you don't have much in your bank account, personal loans are a great way to get money. You can get them through banks, credit unions, or online lenders. To qualify for a personal loan, you must demonstrate you can pay it back.
It is not necessary to have a big bank account to qualify, but you will need to have enough money saved up to pay for the loan.
Download our personal loan app to apply for a personal loan. Get up to 2Lakhs* as a personal loan. Download Now!
Sign into avail a personal loan up to ₹ 2,50,000
Unifinz Capital India Limited is a Non Banking Finance Company (NBFC) registered with the Reserve Bank of India (RBI). lendingplate is the brand name under which the company conducts its lending operations and specialises in meeting customer’s instant financial needs.
