A personal loan is the quickest and the most convenient way to deal with any crises involving money. It offers many benefits such as flexible tenure, instant disbursal, quick online approval, no restriction on end-use, etc. But with many benefits rises many half-baked theories as well that often tend to mislead people regarding personal loan. This, in turn, warrants them to search for more expensive ways to deal with any financial emergency.

Myth #1: Only banks can provide personal loans

Many people believe that the banks are the sole financial institutions that can offer personal loans. The fact is partially true: all the banks do offer personal loans but there are many other NBFCs and digital lenders like PaySense as well that offer personal loans. At times when a bank rejects your personal loan application, you can contact with these digital lenders and NBFCs to get quick loans online as their eligibility criteria is flexible as compared to the banks.

Myth #2: The processing time for loan disbursal is long

Many people believe that the processing of a personal loan takes a lot of time with many formalities involved. The above belief is not true. In these days, most of the banks have been digitized, and with digital lenders like PaySense, you can easily apply online for a personal loan and process your loan application by uploading minimal documents. You can get an instant loan approval online and the amount gets disbursed into your account within a matter of days or even hours.

Myth #3: Personal loan can be used only for personal financing

Personal loans come with flexible end usage, which means that they can be used for any purpose. You can invest the funds availed from a personal loan in your business idea or buy equipment for your business or fund your holidays.

Myth #4: You can apply for quick loans online from multiple lenders at a time

Yes, you can apply for a personal loan from multiple lenders at once but it is not advisable. Because every time you apply for a personal loan, it gets registered at the credit bureau as a hard inquiry. This gets reflected on your credit score. When any lender checks your credit score, he would be able to see the inquiries and you’ll be considered as a credit-hungry individual and thus you might not get approval for your loan application. So, you must only apply with a single lender at a time.

Myth #5: Personal interest rates are very high

Many people think that interest rates are very steep on a personal loan. But you might not know that you can get a personal loan with the rate of interest as low as 11%. The interest rate depends on your credit score, employer, age, repayment history, etc. Again, the interest rates on a personal loan are way low as compared to that of the credit cards, which start from 30%. So, it is always advised to get a personal loan than use a credit card for getting funds.

Myth #6: There is no prepayment option in personal loans

The tenure of a personal loan varies from 12 months to 60 months. Many individuals believe that there is no prepayment option in personal loans. But that is not true. You can prepay your loan before the tenure ends. Some of the lenders may have a lock-in period of 6 to 12 EMIs, but after paying these EMIs, you can close the loan any time before the tenure ends.

Myth #7: Low credit score may lead to loan rejection

This is one of the more common myths. A credit score is definitely one of the most important factors that determine your eligibility for a personal loan. Nevertheless, it does not completely impact your chances of loan approval. A credit score of 750 or more is considered great by the lenders. When you have a credit score lower than 750, other factors such as your employer, income, etc. can help you with your loan application. In such a scenario, the interest rate will be high but you do have the eligibility to get a personal loan.

Myth #8: Personal loans are only for salaried individuals

It is a common misconception that only the salaried professionals with a steady flow of income can get a personal loan. Self-employed individuals and professionals like CA, doctors, businessman, etc. can also apply for a personal loan. The lenders evaluate their credit worthiness and ITR and sanction the loan to them. In fact, some banks even offer personal loans to pensioners.

Conclusion

So, there are many myths stopping people from taking personal loans and using it for their needs. if any of the above 8 myths have ever stopped you from applying for a personal loan you can now apply to get easy personal loans. You can get easy personal loans without a hassle with PaySense. Remember that do not borrow more than you can repay as there is a possibility of getting into a debt-trap. Also, choose an appropriate tenure so that you can repay with a stress-free repayment process.