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Busting Myths About Personal Loans

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As a first-time borrower, you may have many preconceived notions about borrowing loans. Do you think taking a loan requires difficult interaction, high financing costs, or keeping security against your loans?

Allow us to decode some myths about personal loans in India.

1. Do you know that personal loans are available other than through banks?

While banks are a piece of the monetary organizations that deal in credit, there are different non-banking monetary organizations (NBFCs) that offer individual credit.

In a few cases, where banks might dismiss the credit utilization of a candidate because of unbending standards, NBFCs and other computerized loan specialists frequently acknowledge the applications from these borrowers at comparative financing costs and with more customization options.

2. Do you also believe that personal loans involve a long processing time?

Borrowers frequently avoid applying for personal credit because they anticipate a long processing time and tiring paperwork. But do you know that's not true anymore? Loans are approved within 24 hours, and some are immediately credited as well.

3. Do you also feel that your low credit score will lead to loan rejections?

A low credit score can influence the result of your credit application, yet it doesn't always mean rejections. While it is a significant measure for endorsement, banks additionally take a look at different elements, for example, age, pay, realness of reports, fixed commitment to pay proportion, and so on.

4. Do you also think that you cannot take out another loan if you already have one?

You are qualified to apply whether or not you have an existing loan. Your loan specialist will audit your application in view of the reimbursement limit, considering your pay, income, and existing liabilities.

5. Do you also believe that personal loans require collateral?

Personal loans are unsecured loans. They are provided with minimum documentation. Personal loans are quick and do not require any collateral.

6. Do you also believe that only salaried individuals are eligible for personal loans?

It is a typical notion that only salaried people who have a consistent income are qualified to apply for personal loans. But the credit decision is mostly influenced by the individual's earning limit and ability to consistently support the advance.

7. Do you also think that you cannot pay your personal loan earlier?

While banks might charge a little prepayment expense, borrowers can repay their loan before their tenure. You just need to ask or check with them.

8. Do you also believe that it is very tough and complicated to apply for a personal loan?

In comparison with getting a car loan or home loan (secured loans), applying for personal loans is much easier and hassle free. Most personal loans require an online application and are available instantly.

We hope that we were successful in busting myths about personal loans! How many of these did you have?

All borrowing is good and healthy if you have the intention to repay it.

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