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Myths About Personal Loans You Thought Were True

by Saad Shah
personal loans

Applying for a personal loan is the most effective and fastest way to cover daily financial needs when you don’t have enough balance in your account. Personal loans also offer other benefits like quick and easier approval, flexible repayment terms, no end-usage restrictions, and lower interest rates. Unfortunately, there are several half-baked theories and myths about such loans that mislead people who want to fulfill their financial needs by taking personal loans.

In this article, we will debunk the myths about personal loans you thought were true.

Only Banks Offer Personal Loans

Most people believe that banks are the only way to get personal loans. Banks offer personal loan programs but many other financial institutes also offer such loans to help people meet their financial needs. A lot of online lenders offer online payday loans that can be used to fulfill a variety of needs. If a bank has rejected your loan request, you can opt for such online lenders if you meet the eligibility criteria. You can visit https://www.paydaylv.com/apply-now to apply for an online personal loan on better terms.

Poor Credit Score Leads to Rejection

Since credit score is one of the important factors that lenders consider to determine the repayment capacity of a borrower, poor credit scores don’t directly impact the chances of getting your application approved or rejected. However, an individual with a poor credit score may get a loan at a high-interest rate than someone with good credit. Even some online lenders like Payday LV also offer bad credit loans to people who are unable to get traditional personal loans just because of their poor credit history.

The Processing Time is Long

Some people just don’t opt for personal loans as they think it takes a lot of time to get a personal loan application approved. But this is not the fact. As banks and financial institutions are investing in digital solutions and tools, this helps them speed up the loan application reviewing and approval processes. In this digital era of life, you can also apply for personal loans online by uploading necessary documents and personal details. Online lenders review and respond to loan requests instantly within 24 hours. 

High-interest Rates

Another myth about personal loans is that they come with high-interest rates. In fact, the interest rate of a loan depends on several factors like credit score, employment history, repayment capacity, and so on. You can secure a personal loan at a lower interest rate possible if you have a good credit score of 800 or above, good debt repayment history and stable employment & residency records. Just do your homework before applying for a loan and shop around for the best loan offers with lower interest rates.

End-usage Restrictions

Just debunk the myth that personal loans can only be used for personal needs. As personal loans come with no end-usage restriction, you can use the funds anywhere you want. Be it a renovation project, emergency car repair, sudden medical bill, or the matter of loan consolidation, you can take personal loans for any reason in-between. However, make sure to check the lender if there are end-usage restrictions and opt for one that comes with no usage restrictions.

You Cannot Take One if You Have Other Loans

There is no logic behind this assertion that you cannot take a personal loan if you have taken any other loan like a mortgage or auto loan. As it is mentioned above personal loans are also good for loan consolidation, getting a personal loan could be a great way to consolidate your debt to repay them easily without paying lots of bucks towards high-interest rates. Even if you are paying other loans and have a good repayment history, you can get a personal loan with better repayment terms and a relatively lower interest rate.

Final Thoughts

Taking a personal loan is ideal in any situation when you need some extra cash to cover emergencies or other day-to-day purchases. Before submitting an application, gather all important details, do your research, compare available loan offers and shop around for the best interest rate. Don’t borrow more than you can easily pay off as it can cause building more debt and ruin your credit score. Keep developing good repayment habits and consider some credit-building practices to avail best loan offers.

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