Get the Facts: 5 Myths of Personal Loans Busted

2 MinsMar 21, 2023

Personal loans are an excellent financial tool to meet your immediate cash needs without pledging any collateral. They come with flexible repayment options, competitive interest rates, and easy eligibility criteria. However, several myths surrounding Personal Loans can deter people from using them. In this blog, we will debunk some of the most common myths surrounding personal loans. So, you can make an informed decision before borrowing.

5 Personal Loan Myths:

1. Myth: Borrowers must submit a collateral

Another common myth surrounding Personal Loans is that borrowers must provide collateral to get a loan. This is not true. Personal loans are unsecured loans. This means borrowers do not have to pledge any asset as collateral.

2. Myth: The Personal Loan approval process is lengthy and complicated

Many people believe that the Personal Loan approval process is lengthy and complicated. However, this is not entirely true. Most banks and financial institutions have a simple online application process. It can be completed in a few minutes.

3. Myth: Personal Loan interest rates are very high

Personal loan interest rates are indeed higher than some other types of loans. But they are still lower than credit card interest rates. Additionally, some lenders offer competitive interest rates that are affordable for borrowers.

4. Myth: People need a high credit score to get a Personal Loan

A good credit score can improve your chances of getting approved for a Personal Loan. However, it is not the only factor that lenders consider. Many lenders also consider other factors such as income, employment history, and debt-to-income ratio.

5. Myth: Borrowers paying off existing loans can’t get a Personal Loan

This is another common myth that prevents many people from applying for Personal Loans. It is not true. Lenders do consider your existing loans while evaluating your eligibility for a Personal Loan. But paying off existing loans is not a prerequisite for getting a Personal Loan.

Also Read: [Choose a personal loan interest rate that fits your pocket]

Conclusion

To conclude, Personal Loans are a convenient and accessible source of funds. They can help you meet your financial needs. It is important to be aware of the myths surrounding Personal Loans. This will help you can make an informed decision when applying for a loan.

Additionally, Axis Bank offers a Personal Loan EMI calculator on its website. It can help you calculate the estimated EMI for your loan based on the loan amount, tenure and interest rate. It can also help you plan your finances better. You can determine the monthly instalments you will need to pay. You can also calculate the loan amount and tenure that are best suited to your financial needs and repayment capacity.

In summary, Personal Loans can be a useful tool for managing your finances. With the right information and tools, you can make an informed decision about the best loan for your needs.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.