One of the most advantageous financial tools is a personal loan, which can solve many financial issues. Especially, the inception of online personal loan services has made it more convenient for many people. Online loan features are the result of technological advancements in the 21st century.
Online personal loan is a one-time cash flow to the borrowers from the lenders. With a flexible emi loan repayment term, the borrower must pay back the loan amount and interest. Usually, the system of monthly installments is the most common loan repayment system done by borrowers. As technology changes, changes are also coming to this sector too. The online personal loan facility is now available with an instant disbursal procedure where the loan amount gets disbursed within 10 minutes to hours.
Though this whole loan facility is very common, sometimes, due to a lack of proper financial knowledge, people get distracted by the myths related to personal loans. Especially, if you are a first-time borrower, you may hear a lot of false statements about personal loan facilities, which can stop you from borrowing in case of need. So, today, you are gonna explore those myths. You will understand what are the actual details behind those myths and the real method of approved loans online.
Personal loans are available only in banks
The answer is NO. Nowadays, a lot of online platforms like an emi loan app are there that offer personal loans with flexible repayment terms. Those online platforms are Non-banking Financial Companies that RBI monitors. These apps even offer customized loan repayment terms for reliable borrowers with good credit scores.
Only a higher credit score is accepted for online personal loans
This is another myth that stops new-age borrowers. A good credit score is always accepted, but that is not the only eligibility for a insta loan. A lower credit score can not give you the desired customization, but there is no such thing as rejecting a loan application. Rather, personal loans can help people to increase their credit score with on-time loan repayment terms.
Collateral is required
Online instant small loans do not demand any collateral. This is the reason personal loans are known as unsecured loans. Also, there is no such huge paperwork or documentation for being an unsecured loan. Usually, online personal loans are paperless and quick. You can apply for the loan anytime and get the loan amount instantly after verification and approval.
Personal loans increase your debt burden
This may sound quite logical, but this is tricky. Credit cards or other such loans can be reshaped with a personal loan. It is consolidating all your previous debts. After merging all other loans, you need to pay only one monthly EMI to repay the loan.
Personal loans~ higher rate of interest
As there is no such collateral fee or security requirements, many people think it will demand a higher interest rate. But the thing is, the rate of interest on personal loans is comparatively lower than other kinds of loans. The interest rate is also quite lower than the credit card interest. So, it is always a better option for major people.
Only salaried people are eligible for personal loans
For a long time, almost everyone thought salaried people were only eligible for personal loans to satisfy their emergency needs. But that is not true at all. Self-employed people and salaried persons can easily apply for personal loans whenever required. Another main thing is the borrower should have the capability of repaying the loan amount to the lender. The lender may review the credit score and creditworthiness to understand the borrower’s repayment capability.
Every good thing comes with many rumors or myths that can stop people from using those facilities. Online personal loans from various money lending apps are exactly like that. There are a lot of myths that are associated with the loan facility. You should know the facts about those myths to understand those loan features clearly. Hopefully, you have understood and explored what you should know about personal loans. This will keep you from all myths.