Personal Loan is a kind of unsecured loan in which the bank doesn’t ask for any security or collateral. We all know the exact definition of the personal loan but still, there are many people who nourish several misconceptions about a personal loan. Here we have four myths that according to people are true. Check them out
Approval and disbursal take time: Most people think that personal loans involve lengthy processing time and can’t get easy approval but that’s not true. Personal loans are quickly approved and disbursed to people with minimal paperwork. If you’re doing online then your loan will be disbursed within a day (depend on your given documents. If they are appropriate, your loan will be approved and disbursed quickly). Since the personal loan is an unsecured type of loan so the bank doesn’t ask for any collateral.
High-interest rates: According to many people a Personal Loan comes to you with high-interest rates but that’s not exactly true. Yes, personal loan grasps higher interest rate but if your credit score and repayment capacity is strong then your interest won’t be high. For example, if your credit score is 700, then interest will be 5% whereas an applicant with a 680 credit score will get a loan at 8%. That’s why personal loan’s eligibility criteria focus on the income and credit score.
No prepayment option: “Personal Loan comes with short tenure so there will be no prepayment option”. According to many people, this statement is true but not completely. In personal loans, you can relish the option of prepayment as well. With their loan duration usually ranging between 1 and 7 years, personal loan prepayment can help you save on interest costs by preparing whenever they have extra cash.
The online application is a tedious procedure: Still, people visit branches to avail a personal loan. According to people, the application procedure is bothersome. Well, the reality is completely opposite. If you visit branch to branch then obviously the procedure going to be bothersome and tedious but if you go for an online procedure then your loan will be approved and disbursed instantly. Online procedure is completely eco-friendly where you no need to go through lengthy documentation.