Myth 1: Personal loans are the costliest loans
Yes, it is true that personal loans are costlier than secured loans but they are not definitely the costliest one. The interest on a personal loan starts from 10.99% and can be as high as 24%. The interest rate on a personal loan is much cheaper than the most commonly used credit cards.
Myth 2: Availing a Personal loan goes through a tedious process
Many people live with the myth that availing a personal loan is a tedious process. Whenever there is a comparison on a credit card and a personal loan occurs, many people tend to go for a credit card swiping as the fund can be released instantly. But the fact hidden behind is that availing a personal loan has a simple process.
Myth 3: Personal loans are exclusively for salaried persons
Many people who are self-employed or having their own business have a misconception that personal loans are tailor-made for salaried persons. But the fact is that personal loans can be applied by both salaried and self -employed persons.
Myth 4: Personal loans always need a good credit score
There are many people who are in the misconception that without a good credit score one cannot get a personal loan. It is true that credit score is one of the very important criteria which is checked before gauging the creditworthiness of a person.
Myth 5: There are no tax benefits on a personal loan
This is another myth which is going to bust here. one can gain a tax benefit even on a personal loan if the borrower has used the borrowed amount for the education purpose of self or children.
Myth 6: All lenders charge the same
It is just a myth that all lenders charge the same rate of interest on personal loans. The interest rate charged on personal loan differs lender to lender.
Myth 7: Personal loans are for personal uses only
This is one of the biggest myths that personal loans are just for personal uses. But the reality says that one can use a personal loan for education, business, home renovation etc. too. A business loan is costlier than a personal loan.
Myth 8: Personal loans can be taken from banks only
There are many people who feel that a personal loan can be taken only from renowned banks. The myth is busted here.
Myth 9: You can’t apply for a personal loan if you have existing loans-
The real face of a personal loan says that one can definitely apply for a new personal loan while he is already servicing the existing ones.
Myth 10: A longer tenure is an advisable one
This is a total misconception regarding a personal loan. The tenure of a personal loan is always shorter the better. The interest on personal loans calculated in a compounded way. Hence a longer tenure is certain to increase the cost of borrowing.