Whenever there are any unprecedented costs that could possibly emerge out of the blue, most normally turn towards individual loans. Personal loans are a appropriate system for addressing a wide variety of expenditures that need instant funding. They are a hugely preferred mode of credit for lots of men and women as they can be utilized for any objective, as opposed to automobile loans and home loans which have a specified objective.
Moreover, individual loans are unsecured loans as the applicant does not have to have to location his or her assets as collateral for the borrowed loan quantity.
Rohit Garg, Co-Founder & CEO, Smartcoin says, “Being unsecured and easy to avail of has generated an air of mystique around personal loans. Often, people are filled with apprehension and distrust when it comes to applying for a personal loan as there are a number of misconceptions surrounding them.”
Here are the most frequent myths connected with individual loans
Myth – 1 Personal loan has a higher price of interest. Not accurate.
The price of interest on individual loans is established by economic institutions and lending providers on the basis of an person applicant’s repayment potential and CIBIL score.
Myth – 2 Only these men and women who draw salaries can apply for individual loans. Not accurate.
Even men and women who are self-employed or are operating a enterprise can acquire individual loans as the approval of a mentioned loan quantity is more or significantly less dependent on the applicant’s credit history.
Myth – 3 Personal loans do not extend a prepayment solution. Not accurate.
Personal loans do carry a prepayment solution as borrowers can foreclose soon after paying a distinct quantity as foreclosure charges.
Myth- 4 Banks are the only lenders of individual loans. Not accurate.
Move more than classic legacy banks, as there are various NBFCs and digital lenders who are supplying individual loans these days.
Myth – 5 Personal loans involve a extended processing time. Not accurate.
As individual loans are unsecured in nature and do not need collateral safety, they are readily disbursed in a span of 2-7 working days from the time of the initial application, and that also with negligible documentation.
Garg adds, “One should make sure to commit ample time towards market scrutiny and comparative analysis between different lending companies and their financial products to find the best personal loan with the most attractive interest rate.”