A lot of information floats around regarding personal loan leading consumers to opt for inappropriate means to meet their urgent fund requirements. Even sometimes loan seekers elect for more time-consuming, complicated and expensive way outs simply due to a lack of knowledge beyond these myths.
There are numerous financial institutions which provide quick personal loans with affordable EMIs. So, it’s high time people should get separate these common myths for knowing the facts.
- Only a borrower with a very high CIBIL/credit score is eligible
CIBIL score is one of the significant factors lenders need to consider while evaluating the loan applications. Higher the credit score, higher will be the chance of loan approval along with low interest rates on the personal loan. Lenders usually prefer a credit score above 750.
A credit score below the recommended limit doesn’t eliminate the chance of getting a loan approval. Financial institutions have come up with customised schemes catering to borrowers with improvable credit ratings.
When an applicant has a low credit score, lenders provide the advance on a slightly higher rate of interest or a higher tenure.
- Requires collateral
A lot of potential borrowers mistakenly believe that personal loans need upfront collateral to qualify as a borrower. However, in reality, financial institutions don’t pledge any property, and thus borrowers carry the risk of property seizure during payment defaults.
- No part pre-payment option
There is a common misconception that a personal loan doesn’t have the facility of part pre-payment. It is because these loans have shorter tenures and hence believed to have no prior payment options.
However, the fact is many NBFCs allow their borrowers to repay the loan early, reducing the tenure or the EMIs. Usually, the pre-payment amount should be at least three times of the EMI amount.
- Paperwork is too complicated
It’s a myth. Catering to the urgent financial crunch, lenders provide the personal loan seekers with minimal documentation. At the time of application a borrower usually needs to furnish:
- KYC documents
- Employee ID card
- Salary slips for the last two months and salary account statements of the previous three months.
- Lengthy process of application
The converse is true. Nowadays, borrowers do not need to visit the branches physically for completing the entire application process. Living in the digital age, lenders are conducting every step online. In fact, borrowers can get hold of the money within 24 hours, after verification of the primary documents. So, from the application to the disbursal, everything is faster and simpler.
Online lenders like Bajaj Finserv provide quick funds along with attractive interest rates on the personal loan. It also proffers its existing customers with customised pre-approved offers on personal and business loans, home loans, loans against property and other financial products and services.
A salaried individual needs to be between 23 and 58 years of age and should be working in an MNC or private/public sector. A self-employed individual should have business vintage of at least 3 years while being at between 25 and 55 years of age.
These are some basic personal loan eligibility criteria to get the final nod. To get more details of the qualifying features a borrower can also take the aid of online eligibility calculator.
Don’t fall victim to such loan myths and end up with more debts. Compare and contrast the lenders before delving into the final one and get a healthy amount that can range up to Rs. 25 Lakh.