6 Common Myths About Personal Loan Busted: What’s True And What’s Not
Personal loans are the saviours during an immediate financial crisis. As personal loans require minimal documentation, these loans address applicants’ financial problems in a jiffy. Despite its immense popularity, several misconceptions blur the benefits of this loan. In this comprehensive draft, let us have a glance into personal loans and bust the myths around them.
Personal loans: A glance
Regardless of the extent of need, personal loans help the applicant to navigate through financial needs. The lender criteria and interest rates offered for personal loans vary from one lender to another. Applicants can choose a lender convergent to their needs using a personal loan interest rate calculator.
Lenders such as Fullerton India provide flexible personal loan plans starting at interest rates of 12.99%. Surmised below are some of the eligibility criteria of Fullerton India.
Compiled below are the eligibility criteria for Fullerton India.
|Credit score||750 or above||750 or above|
|Age limits||21-60||21- 60|
|ITR||Required while submitting documents||Applicants should have filed ITR for the past 2 or 3 years.|
|Income||A minimum monthly income of Rs 25,000 for applicants from Delhi or Mumbai and Rs 20,000 for other applicants.||A minimum profitable income post-tax which should be a viable amount in the respective industry|
|Work Experience||One year||One year|
Common myths around personal loans and the truth behind them
- Long processing time
Applicants refrain from opting a personal loan fearing the time incurred for its approval. But truth be told, the personal loan application process is the smoothest and the quickest. These loans also do not involve scrutinized operations. They are sanctioned within 2 to 7 days of application submission based on the lender.
- Low credit scores imply rejection
Although credit scores are primary criteria of personal loans, low credit scores don’t imperatively state rejection. Specific lenders sanction the loans after evaluating the repayment capacity of the applicant based on their income, job, and employer. However, an applicant’s low credit score would not mean that loans approved for a low credit profile might come with high-interest rates.
- Self-employed, freelancer or applicant’s with varying income cannot apply
It is a downright myth. With the workforce expanding with self-employed and freelancers, financial platforms these days are flexible to every applicant’s needs. With workable solutions like a co-applicant addition or discussing the scenario with a relationship manager, applicants can get their loan credit approved. Platforms like Fullerton India functions with credit for all criteria and provides personal loans at flexible repayment plans with minimal documentation needs.
- Only banks/NBFC provide personal loans
It is another myth that circulates among the applicant crowd. They refrain from even considering NBFCs or digital lenders. Many NBFCs have relaxed eligibility criteria for personal loan comparison at feasible interest rates compared to several banks/NBFC. Platforms such as Fullerton India, an NBFC, provide personal loans at interest rates starting from 12.99%.
- Applicants with an existing loan may not be eligible
Lenders consider the applicant’s capacity to repay the loan while sanctioning a loan. Generally, an applicant who has an EMI to Income ratio of 60% is approved of the loan. This calculation is taken after considering the EMI on the existing loan. Hence, applicant’s with the financial capacity to repay a new loan will be sanctioned a personal loan, provided they meet the other eligibility requirements.
Personal loans are easy to access credit tools during a financial emergency. Before applying for any credit tool, it is advisable to calculate the EMI with the help of personal loan emi calculator. Apart from that you must have to verify the authenticity of the information and not blindly trust the circulating myths.