Debunking common myths surrounding Personal Loans

Personal Loans have arisen as a popular financial tool, providing individuals with the flexibility to address diverse needs and aspirations. However, there are often misconceptions and myths surrounding Personal Loans that deter individuals from exploring this versatile financial option.
Here, we debunk common myths and misconceptions surrounding Personal Loans, offering you a more informed perspective on this financial instrument.
Myth 1: Personal Loans are meant for emergencies
Reality: While Personal Loans are indeed handy during emergencies, they are not limited to such situations. You can use a Personal Loan for a plethora of purposes, including home renovations, debt consolidation, education expenses, or even planning a dream vacation. It's a financial tool that offers versatility and adaptability to your financial goals.
Myth 2: Personal Loans are only for the wealthy
Reality: Personal Loans are not limited to the affluent; they are accessible to a diverse spectrum of individuals, including salaried professionals, self-employed individuals, and even students with co-signers. Your eligibility for a Personal Loan hinge on factors such as your income, creditworthiness, etc.
To ascertain your eligibility for a Personal Loan, you can utilise a Personal Loan eligibility calculator. This tool evaluates various parameters, including your income, existing debts, credit score, and employment status, to estimate your likelihood of being approved for a Loan and the potential Loan amount you could qualify for.
Myth 3: Personal Loans are expensive
Reality: The interest rates on Personal Loans can vary, but they are often competitive, especially if you have a good Credit Score. Additionally, a Personal Loan calculator helps you estimate your EMIs, allowing you to plan your repayments efficiently and prevent any unexpected financial burdens.
Myth 4: Personal Loans affect your Credit Score negatively
Reality: Personal Loans can have a positive impact on your credit scores. Making timely payments and managing your debts can improve your creditworthiness. If you meet your repayment obligations, a Personal Loan can be a tool to strengthen your credit history.
Myth 5: Applying for multiple Loans increases the approval
Reality: Applying for multiple Personal Loans simultaneously has a negative impact on your Credit Score. Each time you apply, it results in a hard inquiry on your credit report, and numerous inquiries in a short period can be viewed as a sign of financial instability by banks.
Myth 6: Personal Loans are difficult to obtain
Reality: With the advent of online applications, obtaining a Personal Loan has become more accessible and convenient. Most banks have streamlined the application process and have a Personal Loan EMI calculator online, allowing you to apply online with minimal documentation. If you align with the eligibility criteria, you can receive approval within a short period.