6 Common myths about Personal Loans that you should not believe

Generally, all you need to do is meet the personal loan eligibility criteria and ensure your CIBIL score is high enough to get affordable personal loan interest rates. Today, lenders offer personal loans that can be availed quickly to help borrowers access funds in as little as 24 hours.

In fact, lenders like Bajaj Finserv shorten this processing time even further by offering an instant Personal Loan to eligible customers. With just two clicks, you can get the money you need as soon as you need it as the loan amount is disbursed to your bank account in just 20 minutes! Apart from its speedy disbursal time, you can also get your hands on an ample loan amount without incurring any hidden charges or submitting any documents. This 100% digital process enables you to avail of a loan from the comfort of your home, without ever needing to step out.

However, in spite of all the benefits offered by a personal loan, certain misconceptions act as roadblocks restricting you from availing it in time. To help you make a sound choice the next time you are facing a cash crunch, here are 6 common myths about personal loans that you should disregard.

Myth #1: Personal loan applications may be rejected on the basis of low CIBIL scores

Although your CIBIL score is an important factor that lenders consider when reviewing your loan application, it is not the only one. Lenders also look at other factors such as your income and employment status before making a decision. However, this does not mean that you fail to pay attention to your CIBIL score as having a healthy CIBIL score of 750 and above gets you affordable personal loan interest rates and a sufficient sanction. However, some lenders may offer you personal loans even if you have a low CIBIL score – by asking you to apply with a co-applicant who has a high score.

Myth #2: Personal loans cannot be availed over an existing loan

This myth has no basis in reality as lenders review your repayment capability when sanctioning a loan. So, if your income is enough to repay your existing loan as well as a new personal loan, you can avail the new loan without hassles. Usually lenders check for a debt to income ratio of below 40% when calculating your repayment ability.

Myth #3: Personal loans are only offered by banks

This is another common myth among borrowers. Although you can get a personal loan from banks, non-banking finance companies (NBFCs) too offer personal loans on competitive and affordable terms. In some cases, NBFCs may offer simpler eligibility criteria for your loan. Others may just offer you better service. So, check if you meet the personal loan eligibility criteria of your lender and make sure you compare options before you apply.

Myth #4: Personal loans are only sanctioned to salaried individuals

Another myth that stops borrowers from availing a personal loan is the belief that it is only sanctioned to salaried individuals. Although salaried individuals tend to get the loan approved faster owing to a regular flow of income, self-employed individuals can apply for a personal loan too. If you are self-employed, either as a professional or as a business owner, have a good CIBIL score and the desired business vintage, you can get a personal loan easily.

Myth #5: Personal loans involve no prepayment charges

This myth arises from the fact that personal loans have a shorter repayment tenor as compared to other types of loans. So, borrowers believe that they cannot pay off the loan before the chosen tenor ends. However, this is not the case as personal loans can also be foreclosed, though the lender may have a minimum tenor requirement. You can settle the loan by paying the prepayment charges levied by the lender, which are mentioned in their terms and conditions.

Myth#6 Personal loans entail a lengthy processing time This is a outdated belief that does not hold true in today’s times. Since personal loans are disbursed without any collateral, the processing time taken is relatively lesser than secured loans like home loans. While some lenders may take two days or a week to process a personal loan application, lenders that Bajaj Finserv shorten this to a day or even a few minutes. For instance, when you avail a Bajaj Finserv Personal Loan using a pre-approved offer, a 100% digital process ensures you get the loan amount in your bank account in just 20 minutes. As a new customer, you can get the loan amount in just 24 hours from the time you apply!

This quick processing time makes personal loans an ideal solution for urgent requirements.

Disregarding these personal loan myths at the earliest will help you finance your varied needs with ease. Further, opting for the instant Personal Loan from Bajaj Finserv will get you the amount instantly. With your personal loan eligibility being assessed beforehand and your basic details already filled out, all you need to do is complete a simple 2-click process to get the loan you need.

To see if you’re eligible, check your pre-approved offer and avail the personalised loan kept ready for you.

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