Dispelling Common Myths About Online Personal Loans

Common Myths About Personal Loan

Personal Loan Common Myths

Think of any crunch in life, and personal loans are the answer to bring you out of any odds. You can apply for a personal loan online for any crisis or need in life. Personal loans have remained one of the first resources for people facing unprecedented emergencies in life. With the world witnessing a massive pandemic outbreak, many things have gone Topsy turvy for many people out there. People have encountered many difficult financial situations regarding salary cuts, surging medical bills, inflation in necessities of life and plunge in interest rates in banks, which have driven common people to opt for personal loans. 

The salary for a lot of people in India has become insufficient to make ends meet or to fulfill any immediate financial requirements. The financial crunch in life is often unprecedented, and personal loan online has saved millions of people in India, thanks to the loan disbursal companies. Unlike home, education or loans, a cash loan can be availed for any purpose. From buying holiday tickets to engagement rings, you can apply for instant personal loan for any such purpose in your life. If you need to do home repairs or pay fees in your kid’s school or finance your passion, get a one-time cash flow credited to your account when you apply for a personal loan online.

Also Read: Stabilize Thrive Your Company With Personal Loans for Self Employed

However, there are a few common misunderstandings of people, which often pose a problem when Applying for personal loan from NBFC’s. These common myths deter an applicant from considering a personal loan in dire need, thereby leading to situations of panic and worry. Furthermore, these incorrect thoughts about personal loans often led to a lot of confusion and scepticism, thereby aggravating the concerns amidst the already existing situation of challenges for a borrower.

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Common Myths About Personal Loan Online

Let’s check out some of such myths of personal loans, which will give you a crystal-clear idea about this loan the next time you face a need for it.

Only Banks offer personal loans. One of the pervasive myths about a personal loan is that it can be availed only in the traditional way from banks. Many digital lenders and NBFCs offer quick and instant personal loans in cash. What’s more, the lenders like Buddy loan have convenient policies and multiple lenders on the dashboard. The criteria for cash loans with such lending apps are way more flexible compared to the stringent ones of the banks. So, if your application for a personal loan from banks is rejected, the loan payment apps offer customized loan offerings where the probability of approval is way higher.

Only Individuals Earning Fixed Salaries are Qualified for Personal Loans.

This is another extensive myth that only salaried employees can head for a personal loan from NBFC. It is often believed that since salaried employees have secured and stable income, only they are qualified for personal loan applications. Their income can be gauged with payslips, and credit history can be evaluated easily. So, with no inconsistencies in income proofs and no deferred or faulty payments, salaried individuals are often considered the sole candidates for an instant personal loan.

However, this is not true. In reality, anyone earning an income above a certain amount can apply for personal loans. Loan disbursal apps like Buddy loan have flexible eligibility criteria concerning your employment status. If you are a self-employed individual with a steady income flow that is regular and guaranteed, you can easily apply for an instant personal loan. Your past credit history and another ongoing loan monthly payment status will be analyzed and examined carefully by the lenders. Once you clear all, you are through irrespective of your employment nature!

Also Read: Personal Loan for Proprietorship Company Employees

Personal loans come with the disadvantage of a very high-interest rate.

We have often heard borrowers claim that instant cash loans have sky-high interest rates. If you are one among them, there here is the truth for you. Like you, many individuals believe that personal loan interest rates are unaffordable. However, this is often not the case, and the contribution goes to taking personal loans from NBFC and loan payment apps. They set interest rates depending on your credit score and repayment capacity. In contrast to the high personal loan interest rates offered by conventional banking institutions, online lending apps like Buddy loan offers personal loans at just 11.99% per annum. With a favourable credit history, your interest rate on a loan can plunge further.

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Personal Loans Involve a High Processing Duration.

This is not true, with ample lending apps floating in the market. Gone are the days of the tiresome approval process when you only could apply for a personal loan from banks. You no longer have to sweat outstanding in long queues of loan applications or make rounds around the desks to follow up for the application status in the banks. With lending apps, the process is extremely convenient and simple. The entire process can be executed digitally, irrespective of your physical location. You need to have the proper documents like a PAN card, Aadhaar card, income proof, and proof of residence. 

The entire personal loan application process now takes a few minutes to a max of 48 hours. You need to register, fill in the details in the lending app portal, upload documents, and your loan process start.

You Cannot Apply for an Instant Cash Loan if you Already have an Existing Loan

Several individuals believe that they cannot apply for a cash loan with an ongoing loan payment. This isn’t true. Like your first loan, your second loan can be sanctioned in the same way. The lender will assess your loan application based on your existing liabilities, income flow, and repayment capacity. So, regardless of any other ongoing loan, you can apply for a personal loan online.

Your Loan will be Denied with a Poor Credit Score

This was the traditional concept with the conventional banking system when you could only avail of personal loans from banks. So, many loan applicants still believe that a low credit score will reject the personal loan application. The truth is, a low credit score can impact the loan approval but doesn’t necessarily mean rejection. In fact, for the loan approval process, lenders will look for other criteria as well, like income, age, the authenticity of your proof of documents, liabilities, etc.

Every lending app may have its policies for loan approval, but in general, lenders mostly evaluate your intention to repay, your repayment history, and your capacity to repay.

Also Read: 10 Best Tips for Successful Personal Loans

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Personal Loans Come with No Prepayment option

This is yet another predominant myth among common people about an instant personal loan. Several applicants believe that borrowers can’t repay the loan amount before the scheduled due date. This is a common myth when people evaluate the need for a personal loan. Also, personal loans usually come with shorter payment tenure than other loans. This fact also raises doubt in the minds of applicants that personal loans cannot be prepaid. Well, this is absolutely a myth. If you believe the same, then here you go with the truth.

Personal loan amounts can be prepaid anytime before the tenure ends. Many financial institutions, banks, NBFCs, and lending apps have minimum tenure during which you have to make monthly payments. Once your EMIs are paid during a minimum tenure period, you can close the loan by paying it completely. You can foreclose the loan amount with a foreclosure fee if your lender has it in the agreement. However, some popular lender apps like Buddy loan do not involve foreclosure charges.

Personal Loans Can be Availed Only for Personal Causes

Well, we might loosely say that personal loans are for personal reasons, but this is a misbelief. Personal loans can be availed for any reason on this planet! Be it your need to repay another loan, pay college fees, bear medical expenses, pay rents, buy any assets, book a vacation, start a small business, or anything that you can think of, a personal loan is an easy and simple solution.

Check: Personal Loans Trends

A personal loan application is a complex process

Thanks to the loan apps like Buddy loan, that personal loan online applications have become a cakewalk. It is way simpler than applying for a car or home loan or a personal loan from banks. Alternatively, here you need to spare a few minutes from the comfort of your house and need to fill out some details on the app page while you apply for a loan online. You can be travelling, studying, working, relaxing, or doing anything of your choice while applying for a personal loan online. It is that simple nowadays!

A Personal Loan Involves Submitting Hard Copies of Documents.

Again, with the rising popularity of lending apps, you can do away with the requirement of submitting documents at an office like in traditional systems. In this digital age, you can reap the advantage of personal loan online documentation. You can just take scan copies of your documents and submit them online. Just make sure that the images are very clear and authentic, else the lenders might be curious while evaluating your loan application.

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A Personal Loan can Impact your Debt Burden

This might seem true that a personal loan, taken on top of an existing loan, will add to the debt burden. But there are convenient ways to refinance your loan, like applying for another loan, turning it into lesser EMIs, paying through credit cards, etc.

A Personal Loan Requires a Mortgage

Well, you might be mistaken about this belief if you have ever applied for education, home, or car loan. These loans do involve mortgages, but personal loans do not. These are cash loans that require no collateral and are therefore considered unsecured loans. You just need to adhere to the documentation process. Also, this is another lubricating factor that makes personal loan applications so hassle-free.

You Need all the Documents for a Personal Loan – PAN card, Passport, Voter ID, and Driving License

There might be banks and some lenders who ask for all of the documents while filing for a personal loan. But many loan disbursal apps like Buddy loan require you to have only one document among these. You can show any documents as your proof of identity while you apply for a personal loan online.

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Online Applications can Lead to a Data Breach.

This is your wrong belief, especially if you are more comfortable with traditional application processes. The loan granting apps are, by the rule of law, abide to maintain your data safe and secure. You can completely trust, like millions of other applications, that there will be no data leakage with Personal loan online apps like Buddy loan. Apart from the lender, they do not share your data with any third party. 

Avail Loans from Popular Loan Apps

Since you are now clear about all the doubts you have had in mind to date about personal loan online applications, it’s time to understand one more important point. Do explore well before approaching a lending company or NBFC while planning for an instant personal loan. Ensure there are no hidden charges involved when you apply for a personal loan online. Also, make sure that the loan app you choose is trusted and authentic. Also, it is important that you are convinced with the entire loan application process and that all your queries are answered by customer support. Always proceed with the loan payer, which is transparent about the entire process.

Also Read: The Affect Of Employment Status On Personal Loan Approval

Wrapping Up

Being said all of the above, the crux of the matter boils down to the fact that if you ever have any misconception about personal loan online applications, do visit this page to clear your doubts. You can also contact your loan app like Buddy loan to clarify your inquiries regarding the entire procedure. Buddy loan has an efficient customer support service to assist you throughout the process. Also, they have extremely flexible policies and processes to let you enjoy a hassle-free loan application. You can choose your loan amount, EMI, and tenure period in their portal. Also, enjoy the benefit to choose from among different lenders in their dashboard. Visit their website for more interesting information about the loans.

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