Discover These Personal Loan Myths that Halt Your Financial Success

People tend to stay away from personal loans for many reasons. We’ve heard of stories how people who acquired personal loans ended up in pure bankruptcy mostly due to high-interest-rates. But what you didn’t know is that a personal loan can actually be your friend and help you achieve your financial goals when managed properly.  We’ll debunk these myths and show you how a personal loan can become a great financial asset.

It Needs Lifetime Commitment

The truth is, a personal loan is not a lifetime financial commitment.  It isn’t like a housing loan where you need to pay it for 20 to 30 years. Most financial institutions can grant a 10-year tenure period at most. That’s why you can finish paying it sooner. You don’t need to bind yourself to a debt for a long period of time.

It’s only for employees

A personal loan is for everyone who works hard and pays his/her debts in time

While having a regular and steady job is a plus in paying a loan, it isn’t a requirement for acquiring one. In fact, even a self-employed individual can avail a personal loan. Whether you have a business or are a self-employed professional, you can apply for a personal loan with ease. The bank needs only to assess if you have the capability of paying your loans in due time.

It Requires Credit Reports

Most loans need their applicants to submit good credit reports to avail it, but not with personal loans. Financial institutions will only require a minimum income bracket to assess your ability in paying loans promptly. Although having good credit reports can help fasten your loan approval, you can still apply even if you’re a first-timer.

Acquiring a Personal Loan is a Long, Tedious Process

Many people think acquiring a personal loan involves a lot of paperwork, but that isn’t the case. Today, most banking institutions offer personal loans with minimum documentation. Most of the time, it gets approved within 24-hours from the date of application. There’s also no need for a guarantor or collateral anymore. That’s why you can avail a personal loan without giving up your financial assets and real estate properties.

Personal Loans Can’t Fund Your Business

A Personal loan is a great way to test the waters before you start investing in your business

You might think that personal loans are only meant to fund your personal expenses, but that’s where you’re dead wrong. The truth is, you can use your personal loan to fund your business. You don’t have to avail a business loan right away and get stuck with paying high-interest rates.

Personal Loans Have Insane High-Interest Rates

Why isn’t this true? It’s because personal loans have the lowest interest rates compared to other available loans out there. In fact, acquiring a personal loan is a good way to cut all your other debts. You can pay your debts using your personal loan without worrying about paying the interest. Personal loans also serve as a great emergency fund.

Breaking Beyond the Myths

Now that we’ve debunked these myths, we’re sure that you’re now more than excited to avail your first personal loan. And while we’re ecstatic for you, we advise you not to avail a personal loan more than what you need. Why? It’s because borrowing more money only puts an unnecessary burden on you. Not only you’ll pay a higher-interest-rate, but your tenure period also gets extended. You don’t want to pay your personal loan longer than what you need, right?

Make sure to loan responsibly and manage your debt properly to avoid financial distress

The truth is, some people tend to avail a personal loan for their leisure like traveling, buying a high-end gadget like iPhones, etc. They tend to borrow money to buy things with no real purpose. This is the perfect recipe to drown yourself in debt. Instead, practice availing a good debt. Examples of good debts are borrowing money to fund a business, have your house renovated, to cover your medical expenses, etc.