Getting a personal loan is a perfect way to deal with a financial crisis. There are many benefits of availing a personal loan. It is an unsecured loan, thus no need to submit collateral. The approval process is quick, with no control on how to use it.
However, when there are so many benefits, it leads to confusion too. There are many confusion and myths about instant personal Loans. So, here we wanted to clarify some of the myths. Keep reading to know more.
You can get personal Loan only from Banks
Many people believe only traditional bans give personal Loans. However, this is not the case. In today’s time, there are many NBFCs and digital lenders who provide personal Loans. So, three platforms offer instant personal loans. Traditional banks such as HDFC and SBI, NBFCs such as Aditya Birla personal loan, Mahindra finance personal loan and Digital lenders such as Nira and Credy.
If you have a low credit score, your loan application will get rejected
There is no doubt; the credit score is one of the essential parameters to check applicant eligibility. It leads to rejection too. But it does not happen with every case. There are other factors, which are involved who play an essential role.
A credit score above 750 is considered excellent. However, lower than 750 does not mean you won’t get an instant personal loan. There is Income factor, where you work and the loan amount you need. However, when you need personal Loan on a low credit score, you likely have to pay a higher interest rate.
You will get personal Loan only if you are a salaried
This is one of the biggest myths about personal Loan that it is not possible to get a personal loan for
Self-employed. However, it is not even remotely true. Similar to a salaried professional, an independent such as a doctor, Businessman, and professionals. Whether it is a salaried personal or independent professional, both have an equal chance of getting a personal loan.
The processing time to approve the Loan is too long
When you heard people saying the processing time is too long, how long does it mean? In the case of personal loans, the approval time is from 3 hours to 24 hours. However, if you compare it with a traditional loan process, you can say, it is not very long.
The interest rate is too high
If you analyze, you will see the interest rate depends upon the applicant profile. If the applicant's credit score is low, the income is not high and repayment history. So, you can see how a lot of factors decide the interest rate. For some applicants, it could below; for some, it could be high. It won’t be always top like 21%, 25% or 30%.
If the applicant has a good history, then one can get a personal Loan as low as 10.99%.
So, these are the popular myths about personal Loans. You can see how far they are from reality. We are sure it will help you in clearing the doubt. If you have any queries, do let us know.