Hesitant to take a personal loan? 6 top myths you need to bust right now

One of the primary reasons why people take personal loans is to finance emergency needs, from medical to urgent travel expenses. Though nowadays, people are also taking Cashbean loans or other types of loans to fund their home renovation, buying an engagement ring or funding their wedding expenses and whatnot. Unlike credit cards, a personal loan comes with a lower interest rate and allows one to get a large sum of money with longer tenure, which is not possible with a credit card. 

Though one could get a personal loan within 10 minutes from the Best loan apps available in the market, there is still a section of people that is hesitant to take a personal loan and rather depend on relatives and friends for credit. Here we are busting top myths surrounding the personal loan that usually seem to fog one’s judgement while choosing a personal loan:

Only banks are eligible to offer personal loans: This is the most common misconception people have about a personal loan. While banks are part of the financial institutions that offer loans, there are multiple NBFCs (non-banking financial companies) that are eligible to offer personal loans to consumers as well. Now, there are a number of online platforms like Cashbean loans, which too can offer personal loans with better terms than a traditional bank. In several cases, it is seen that consumers can easily get a personal loan from these online platforms and NBFCs at better interest rates when they are rejected by the traditional banks.

However, just like everything, ensure the app listed under Best loan apps is licensed by the RBI and if you spot anything fishy in it, immediately inform the RBI about it. During the Pandemic, many such online platforms have opened that are offering a good deal but aren’t licensed by the RBI. 

It involves a long processing time: Many borrowers refrain from opting personal loan due to the misconception that applying for a personal loan will take weeks to get approved. Thus, as an easy way out, they choose a credit card which has a higher interest rate than a personal loan. This may have been true in the past, but it doesn’t entirely hold true in 2022. The whole process of application, from disbursal to loan sanction, can now be done within 24-48 hours. All one needs to do is fill out the application via their official website, upload the requisite documents and click submit. The bank will revert you within a few hours regarding any other information they need, and before you know it, the amount will get credited into your account. 

If I have a low credit score, my loan application will get rejected: This statement is partially true. Having a low credit score can impact your chances of getting your loan application approved, but it doesn’t guarantee a rejection. There are other factors that lenders also look at while sanctioning a loan to you. Income, your job status, job profile, any other source of income you have, etc. In case your application is rejected from one financial institution, you can use Best loan apps to narrow down one bank you want to apply to, or you can opt for a Cashbean loan. The eligibility criteria of a personal loan application may differ from lender to lender, but every lender wants to see whether you will be able to repay the amount or not and if you could prove it through other sources of income, then your chances of availing yourself of personal loan are high. 

Only salaried individuals can apply for personal loans only: This used to hold true a decade back. It is because personal loans are unsecured, which increases the chances of customers defaulting on them even more. So, to ensure security, banks only used to give off loans that are salaried as this increases the chances of repayment even more. But now, individuals who are not salaried but are in different professions can also apply for a personal loan. All they need to do is show their bank statement indicating the steady flow of income. 

Taking a personal loan will only increase the debt burden: This is partly true; taking a personal loan will indeed add it your budget, but you can also take a Cashbean loan to refinance all of your existing debt into one single debt. This way, you will have one EMI to pay at the end of the month. 

It requires collateral: Personal loans are unsecured loans and thus do not require any collateral. It involves minimal documentation, and the loan is disbursed usually in a day or two. If you have a good credit score, you might be eligible for a preapproved loan. 

Point to be noted though

If you are a first-time borrower, you may be nervous about availing of credit. There is a misconception amongst people that a personal loan is a time-consuming process, involves high interest, and one has to have collateral to give against. These and the aforementioned are a few of the myths that deter people from availing of personal loans. 

With the help of Best loan apps and due to advancements in technology, one could apply for a personal loan with Cashbean loans or with any other loan application in under 10 minutes and can know the interest rate charged by the financial institution in advance. However, the complete process from application to disbursal takes at least a day. As with any other financial decision, taking a personal loan involves asking yourself multiple questions such as which lender to choose from, which tenure to choose from and how to be eligible for a personal loan? While answering these questions, one should understand whether they are in a position to repay the debt with interest without defaulting on it. In case you default on it, your personal loan will attract a penalty that will affect your credit score to take a dip, and this will affect your future chances of taking any form of credit.

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