In the world of personal finance, personal loans are often connected with various misconceptions. These misconceptions can lead to making wrong and uninformed decisions. It is essential to have a deep understanding of all the factors and rid of the misconceptions and myths related to the same.
Here in this blog, as we move forward, we will be debunking certain myths and misconceptions in the world of personal loan. This will further help you have a clear understanding and knowledge of all the factors and help make a better decision.
Let’s begin!
Personal Loans are Not for Everyone
One of the biggest and most common myths about personal loans is that people believe it is not for everyone. Instead they believe it to be limited for people who are going through some financial trouble or a financial crisis.
Bursting out this myth, personal loans are for everyone and can be availed even when there is no such financial crisis going on. These personal loans can be availed and used for various occasions such as renovating home, weddings, a large purchase and even for a small trip that you are planning.
The key aspect to be considered here is being responsible about borrowing and returning the money on time, to avoid any late fee, fines or charges. Taking a personal loan can help you to align with your financial goal with enhanced capability, allowing you to have a smooth transition.
Another point to remember here is that the amount of personal loan being availed should also align with your repayment capacity as to avoid any financial strains on you.
Personal Loans Comes with Higher Interest Rates
The second myth or the misconception about personal loans is that they always come with a high interest rate. This is a common misconception which most people believe hence they steer away from personal loans.
However, this is not the reality. Personal loans often are available with different interest rates (most banks offer personal loans with an interest rate range of 10.50%-24%) based on the credit score and the lender policies as well. However, these interest ranges can vary from one bank to another. With excellent credit history, cibil score and other parameters you can avail personal loans with lower interest rates as compared to others. This further makes your overall experience with the personal loans better and allows you to enjoy the lower interest rates. The key point of consideration here is to shop more and compare offers from different lenders before committing to one. This process would help you land the best rate possible in the industry.
Personal Loans Can Affect Credit Score
Coming on to busting the myths and misconceptions of the personal loans, the third point here is that availing a Personal Loans can affect your credit score. However, in reality the only impact the personal loan is going to have on your credit score is how you manage the loan. With timely repayments and lowering your overall debt can have a positive and long-term impact on your credit score. This credit score in future is further going to help you get a personal loan at a lower interest rate.
With a credit score of 350 which falls under the poor category, getting a loan is not that easy however, with a higher credit score such as between 540-650 chances are higher. If you go higher in the range with 750-800 the chances of getting the loan are even higher.
Hence, the connection between the two is not in a negative way, instead it offers all the positive impact on each other. With constant and timely repayments, it demonstrates your capability to manage your finances without any issues and helps with a good finance reputation and financial future.
Getting Personal Loan is Not Easy
Moving forward with the list of myths regarding personal loan apps and finances. The next point of discussion here is that getting a personal loan is tricky and not everyone can qualify for it. This is absolutely not true. Yes, there are a lot of factors of consideration by lenders in the overall process of deciding for personal loans, but it is rather easy to qualify for it. For some lenders a not-so-perfect credit score can not be an issue which can hamper your personal loan. Hence, the gist of the point here is that qualifying for a personal loan is not difficult, you are required to go through all the required parameters and ensure that you fit either of them. Additionally, if you ensure to maintain a good credit score, reduce your debt, and offer a stable proof of your constant and steady income, it can increase your chances of qualifying for a personal loan with lower interest rates and other favorable terms and conditions.
Personal Loan is Your Last Resort
Many people believe that instant personal loan should only be used as your last resort and your last option in case of any financial emergencies. That’s actually not the case, with frequent personal loans and repayments, it can help to have a positive impact on your credit score and build a good financial future and reputation for you. These factors combined together can help you get a better and advanced opportunity for your personal loan. This works as a tool to help you get better offers and interest rates while applying for personal loans. Availing for personal loans can further be used strategically to enhance your credit score and build a good reputation among the credit lenders
Concluding Points
Now that we have covered and busted some of the most common myth bubbles regarding personal loans, the picture seems clear to you. If you look in the financial market at this point, there are various lenders available that offer you quick personal loans. Brands like FatakPay are emerging in the financial market, offering easy and quick personal loans to manage daily needs.
FatakPay can help the users to manage their everyday expenses, any unexpected expenses at ease without putting any additional financial burden or strain.in addition to this, the app also offers you with a transparent and easy on-boarding application process along with flexible repayment options.
The goal of FatakPay here is to empower the users to achieve their financial goals, maintain their credit score and reduce their financial struggle.
This requires you to strategically plan your finances and apply for short term personal loans with FatakPay, and avail of small instant loan app for basic needs. In addition to this you can also avail different features such as the EMI option for aspirational needs. .
For more details and information get in touch with the experts here at FatakPay and start your financial journey today.
