Personal loans are often misunderstood. Many people, especially first-time borrowers, have doubts that may prevent them from reaping the benefits of a personal loan. Have you been taken in by any of these myths?
Myth: Personal Loans Are Only for People Who Are Employed
Steady employment can help you repay a loan, but it’s not required to get a loan. If you’re self-employed or a private business person, you may still be eligible for a personal loan.
Myth: It’s Difficult to Apply for a Personal Loan
Some people think personal loan applications are tedious and time-consuming. In fact, personal loans often require less documentation than most other types of loans, and the process is fairly straightforward. Want to ensure it goes smoothly? Make sure you have all the documents and information when you’re ready to apply. If you have questions about what you’ll need, just contact us.
Myth: Getting Approved for a Personal Loan Takes a Long Time
A personal loan is actually one of the best options when you need money quickly. Approval is as fast as one business day, and borrowers typically receive their money in less than a week.
Myth: A Personal Loan Can Only Be Used for Personal Expenses
You don’t have to use the money for personal expenses. While it’s a good way to accomplish personal goals, like debt consolidation or paying for a major life event, a personal loan can be used for nearly anything.
Myth: To Get a Personal Loan, You Must Have a Stellar Credit Score
A good credit score can get you a better rate, but people with lower credit scores are often eligible for a personal loan. If you’re turned down for a personal loan, it’s probably due to a large amount of outstanding debt, or a lack of income to cover the monthly payments.
Myth: Personal Loans Require Collateral
While secured personal loans that require collateral are available, they’re not as common unsecured ones that require no collateral. Most modern lenders now look at things like the borrower’s income level, credit history, and credit score when making a decision on a loan application.
Myth: Personal Loans Trap a Person in Debt for a Long Time
The truth is, many lenders offer flexible payment options that allow borrowers to repay the debt in about one to five years.
Myth: It Doesn’t Matter Where You Take Out Your Loan
There are many different places to take out a personal loan, so shop around and find a lender that offers low rates, personalized service, and transparency of information. Once you find a trustworthy lender, you can confidently take out a personal loan to help you reach your financial goals.