It’s Time to Debunk Myths About Personal Loans
Most people might hesitate getting a loan for themselves due to varied reasons. Popular myths often discourage people from opting for a loan and they might be intimidating at first. But scrutinising these myths should ease up the suspicious few and get them comfortable with their decision to avail one. Interested people can always check the internet for information from reliable sources regarding where, how, and when they can apply for loans. One can also find personal loan calculators and interest rate lists that compare information from one institute to the other. However, these are of little use when one only believes in hearsay instead of knowing the truth. We’ve gathered here some myths and broken them down for you to kickstart your way to better finance.
‘Banks are the best sources of loans’
While they’re the most popular, banks are not always the best source of loans. Each bank is unique when it comes to loan policies. They have different preferred percentages, risk appetites and loan requirements. There are banks that implement higher interest rates to low-scorers while there are those who only accept high-scorers and offer them low interest rates. Peer-to-peer lending and online lenders have become popular recently. This resulted in different institutions offering more competitive deals. Don’t narrow the options to just one source. Explore the market and know other options.
‘Only one loan is allowed at a time’
This is usually the advise given by most people. However, this is not true. Individuals are eligible to simultaneous loans as long as there is sufficient cash flow, good debt-to-income ratio, and good credit scores. But it is best to be cautious about having multiple loans at once. This can lead to higher interest rates and higher debt-to-income ratio. Unless we are good with managing multiple financial liabilities at the same time, think thoroughly before making a move.
‘Applying for personal loans will take forever’
The process of applying for a personal loan isn’t as time-consuming as we think it is. Institutions usually provide straightforward directions regarding the process and even have people to assist us throughout. To have smoother transactions during application, have the documents and information ready. Be prepared and familiarize yourself with the procedures. When in doubt, don’t hesitate to call the institution to have these questions answered by a professional. They can walk us through the process over a phone call too. Some institutions can even screen and pre-qualify us over the phone. Remember: knowledge is key!
‘Borrowers will drown in debt’
This frightens many who are yet to even apply for a loan. Institutions have now provided more flexible paying schemes these days. Other banks even give their clients the freedom to select the length of period by when they are likely to pay back their loan. This helps borrowers manage their finances better and be less burdened at the end of the month when all their bills are due. There is no need to worry when one has stable income and possesses the commitment to pay.
‘Personal loans are more expensive kinds of loans’
It’s not all the time that personal loans are the priciest. While personal loans have higher rates than unsecured loans, it’s still actually cheaper than other kinds of loans. This type of loan is cheaper than cash advance or payday loans, which we may have to pay during our next paycheck, not to forget repaying the agonizing interest rates. Although personal loans don’t really have the lowest rates, savings can add up over time. It’s just a matter of calculations and we’ll see through it.
‘Applying for loan shows you’re unreliable with money’
Borrowers usually get the misconception that they’re irresponsible with their finances and that is why they need loans. This shaming of ourselves needs to stop. There are multiple reasons behind applying for loans. While it’s true that most people apply for credit to save them from financial obligations, lenders usually grant loans to individuals who are fully capable of returning the money borrowed. Lenders have ways to assess the reason behind the application and they make sure that the borrowers have the financial capacity to return it. Otherwise, loans are not granted. Sure, we may not have the money to fund ourselves at the moment. But having a loan granted and repaying it in time just demonstrates how responsible and mature we can be when it comes to handling finances.
Let’s face it. When don’t have money to blow, all the time. Good thing there are institutions who can help us in the time of need. Now that we know some of the myths circulating around personal loans, we should be well prepared to take that first step to better finances. Ignorance may be a bliss, but it surely is not when it comes to this matter.
More in Debt
The Best Books that Every Investor Should Read in 2022 – Part I
A 2020 Gallup poll found over half of Americans own stock, closely related to household income and education levels, among various...February 13, 2023
Hollywood’s Plastic Surgeons Admit Business Boomed During Lockdowns
Nobody knows they had it done Celebrities got liposuction, nose jobs, and invasive procedures done, when the lockdown cancelled performances. Invasive...February 9, 2023
Why You May Keep Getting Rejected for a Pre-approved Mortgage
Getting pre-approved for a mortgage is a first step towards buying a house. Suppose your pre-approval is rejected? Though disappointing, it...February 7, 2023
Does Biden’s Student Loan Forgiveness Help?
President Biden’s long-awaited scheme for student loan forgiveness plan will clear debts of millions of borrowers, with minimal impact on others. Saddled...February 6, 2023
Inflation forces 38% of American Adults To Delay Major Purchases
Many American adults are delaying major milestones such as buying a house or buying a car due to inflation. 51% of...January 31, 2023
How Employers Benefit from Helping Workers Pay Student Loans
When a person starts working in any job, one of his or her ideal priorities is to start saving for the...January 27, 2023
Some Wildly Successful Crowdfunded Start-ups that Had Us Surprised
A successful crowdfunding campaign can take your business to reach the next level and some start-ups whose crowdfunding campaigns managed to...January 26, 2023
Ever Wonder What Donald Trump Eats in a Day? We Have the Answers!
The diets of famous people are fascinating and we all would like to know how our favorite celebs nourish themselves, more...January 25, 2023
Investing in Your Workplace that Encourage Working Parents is Better in the Long Run
Parenting is challenging, and working parents require society support where they work. The more comfortable workers feel the more effort goes...January 23, 2023
You must be logged in to post a comment Login