Unsecured Personal Loans – 10 Myths to Deal with

Personal loans can be useful if you need quick cash in hand. Short term loans can be obtained in a week and there is no restriction on where you can spend the amount. You can even pay off bills or other debts with it!However, there are some myths about personal loans—as many believe it’s a trap. So today we are going to clear off these myths so that you can go and obtain unsecured personal loans without any hesitation.

So here we go;

1. They are the most expensive

The rates of personal loans vary from 12 to 14 percent and that’s why many people stay clear of it. They are of course extra expensive than secured loan (where you have to produce a collateral) but cheaper than credit card rate of interests, which are 22 to 36 percent. So it becomes a no brainer to opt for personal loans (which also come with various seasonal rebates) rather than credit card debts if you require quick cash.

2. You do not get tax benefits

People often run away from personal loans because of this non-existing truth. When you need to put the tax deductible over the personal loan, the income or the interest taken up for property making, or a new house has, to be put in.

3. Only Indians and salary slip holders can get the loan

People who are self-employed, NRIs and also businessmen can also obtain this loan. In fact some banks and institutes also grant loans against house rents that you generate from your property.

4. Difficult to get passed

You can get your personal loan approved in less than 48 hours and documentation can also be at minimum.

5. Top banks only give personal loans

Nope, apart from the top banks, even the small institutes and banks provide this loan at good rates.

6. Bad score is equal to no loan

Yes your score can have an effect on your loan. But your prolife (both professional and personal), your credit history, and extra income are also taken into consideration. Even with a bad score you can obtain a loan from various places and with it you can improve your score too.

7. No profit in paying off credit card bills with this loan

Credit card rates can go up to 36 to 48 percent if you are not paying them up. Hence you can always balance it by taking a personal loan against it.

8. The loans are a hassle

Well that’s not right. If you have multiple loans, just take a personal loan at a cheaper rate and convent all others into one. It may be beneficial for you as it may reduce your interest amount.

9. You must apply much more than you need

You must apply as much as you need; as there is no point using the loan to pay off your EMIs. You just don’t have to put in additional load, as non payment can be bad for your credit score.

10. You can apply at multiple banks and institutes

You can do it, but you must not exercise it. All banks will know about your pending and previous applications. Hence it can hamper your chances. Hence it should be— one application one bank policy. Also you apply for another if you need one more.

So, there you go, all the myths have been popped.

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