Personal loans are often misunderstood by many! But, this finance option can quickly bail you out of medical emergencies, wedding expenses, foreign education, etc. You can finance most things using this loan, that too, without pledging any collateral. Yet, numerous myths surround this loan type.
And we are here to bust them! Make personal loans work for you after ridding yourself of the following myths.
Myth 1 – Only High CIBIL Score Individuals Can Avail of Personal Loans
Sure, your credit score is a critical factor determining eligibility, rate of interest, loan amount and repayment terms, but it isn't the only thing that matters. If you have a credit score above 700, you have a great chance of getting a personal loan.
But, if your credit score is below 700, it doesn't mean you will not get one. The only difference between high and low credit scores is the interest rate. Lower CIBIL score invites a relatively higher interest rate and vice versa.
Myth 2 – Banks Only Sanction this Loan to Salaried People
This tit-bit is entirely untrue. Lenders sanction personal loans to both salaried and self-employed individuals. As long as you have a stable income, your employment type is not of major significance. Indeed, many self-employed individuals are encouraged to apply for personal loan online rather than opt for traditional alternatives that are more expensive.
The personal loan application process is similar for both salaried and self-employed individuals. Banks evaluate cash inflows and credit records before sanctioning the loan in both cases.
Myth 3 – Approvals Take Long for Personal Loan
This is far from the truth! Personal loan approvals are just as quick, perhaps quicker than many other categories. Some lenders allow potential borrowers to apply for personal loan online by filling out a digital form, uploading relevant documents and earning instant approvals.
Even if the document verification process is longer, you will receive approvals within a day or two. Lenders understand that this loan is often used for emergency expenses, so they have invested in technology that ensures speedy approvals and funds disbursal.
Myth 4 – Borrowers Can Use Personal Loans for Specific End-Purposes
Not at all! One of the most significant advantages of personal finance is its unspecified end-usage. From taking an expensive family vacation to paying off hefty medical bills – personal loans cover it all. As long as you avail the money for personal use, there is no restriction set by the lender.
Myth 5 – Lenders Don’t Sanction Personal Loans if Borrowers Have an Ongoing Loan
Even if you are repaying an existing loan, lenders can sanction a personal loan. Sure, you need to show you credit score, employment status and other documents. But, as long as you haven’t defaulted on any past credit repayments, you are eligible to apply for personal loan online.
If everything checks out, and the lender feels you have enough funds or source of funds to make the repayments, the approval and disbursal will happen quickly.
Do you have more than one or two loans running simultaneously and you wish to take a personal loan? In such as case, we advise you to consolidate your debts first, i.e. pay off as much as you can or choose a balance transfer to combine all your loans into a single one and then apply for a personal loan.
To Sum Up
Believing in fallacies such as these can keep you away from a perfectly useful financial instrument. After reading this, if you wish to apply for personal loan online, turn to the best in business – IndusInd Bank.
We offer personal finance at attractive interest rates, flexible loan tenures, and easy documentation. To know more about our personal loan offerings, get in touch with us today!
