Are you one of those who have wanted to explore the personal loan option but been bogged down by the common misconceptions in the market? Many people go with a preconceived notion that personal loans are difficult to access, the eligibility criteria are stringent, interest rates are too high and the repayment plans are too rigid. Well, if you are one of those individuals, read on for we will bust these common personal loan myths for you!

Myth 1: Personal Loans are accessible only to Salaried Individuals

Myth 2: Say GoodBye to Personal Loans if your credit score is not up to the mark

Myth 3: The Interest Rates are exorbitant

Myth 4: Only Banks provide personal loans

Myth 5: The processing is cumbersome and time-consuming

Myth 6: You will have to hold personal loans till the end of the tenure

Myth 7: If you have an existing loan, you cannot get a personal loan

Let us explore these myths one at a time.

Myth 1: Personal Loans are accessible only to Salaried Individuals

While it is easiest for salaried individuals to get a personal loan because of the ease of providing documents and proving their repayment capacity, it is not difficult for self-employed individuals to avail of a personal loan. The only difference is the nature of documents to be provided as proof. The amount of loan may, however, vary depending on the merit of the case. It is safe to say that personal loans are available to all Indian citizens/residents who are over the age of twenty-one years and have a monthly income of over Rs 30,000.

Myth 2: Say GoodBye to Personal Loans if your credit score is not upto the mark

A credit score is generated by CIBIL based on your credit history. Credit History starts getting compiled only after six months of having a job/ business income. 

The CIBIL score is calculated as a numeric value between 300-900. Normally, a score of 750 or above is considered good and makes the loan approval process easy. This doesn’t automatically mean that those having a credit score below 750 are denied a personal loan. A credit score is one of the factors taken into consideration when a loan is being approved. However, it is not the only factor that determines the approval. If you have a good income and your repayment capacity is good, a personal loan may be granted in spite of having a lower credit score. However, you have to bear in mind that a higher interest will be charged from borrowers having a low credit score to compensate for the additional risk involved.

Myth 3: The Interest Rates are exorbitant

While we are on the topic of high-interest rates, do you have any idea how much interest a credit card charges on the outstanding amount? They charge anywhere between a whopping 24-36% annually.

Personal loans come at a variety of rates depending on your credit score and the repayment track record. At LoanTap our personal loans start at 18% per annum. If you compare it with the unauthorised sector of money lenders, the interest rate is much cheaper.

Myth 4: Only Banks provide personal loans

This is another common myth that needs to be busted. It is not only Banks that can provide personal loans, NBFCs and digital lenders are also offering personal loan facilities to borrowers. You can explore the multiple options available and select the one that best suits you. The internet provides you with all the information that is needed. We are specialists in tailored personal loan solutions. You can visit our website https://loantap.in/ for all details regarding personal loans.

Myth 5: The processing is cumbersome and time-consuming

This is absolutely incorrect. Over the years, taking personal loans have become very easy and hassle-free. If you meet the basic eligibility criteria, getting a personal loan is a breeze. For instance at LoanTap, all you need to do is to fill an online application and upload the following documents

  • PAN Card
  • Aadhaar Card/Driving Licence/Passport
  • Salary Slips of the last three months or proof of monthly income
  • Bank Statement of Salary Account or Business Account
  • ITR Returns/ GST Returns (in case of self-employed individuals)

If the documents are in order and the credit score and other parameters are in place, the loan gets processed within 24-36 hours and the amount gets credited to the mandated bank account. 

The process is so simple and hardly consumes any time. It is the most convenient financing option available. Before you swipe your credit card for your next big-ticket expense, you should consider looking at a personal loan.

Myth 6: You will have to hold personal loans till the end of the tenure

At LoanTap, we provide personal loans ranging from Rs 50,000 – Rs 10,00,000 for a tenure of six months to sixty months. We offer multiple repayment options like Interest Only EMIs, Step-Up, Overdraft repayment, term repayment etc. Once you service the loan for six months, you are free to foreclose the loan without any prepayment charges. So the myth that you will need to hold the personal loan till the end of the tenure does not hold water.

Myth 7: If you have an existing loan, you cannot get a personal loan

There is no such rule, written or otherwise, that you cannot get a personal loan if you have existing loans. It depends on your job, your salary and your repayment capacity. It is better to ensure that your total EMIs do not exceed 50% of your salary. Keeping this and the other factors in mind, you can always apply for a personal loan even when you are servicing other loans.

Now that we have successfully busted the myths and misconceptions surrounding personal loans, we are sure your interest is piqued and you would like to explore the perfect personal loan tailored for you. Whether it is that dream holiday or the new fancy gadget, a house renovation project or your dream wedding, you can visit the LoanTap website and pick the loan that suits you. We will be more than happy to help you out.

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Satyam Kumar is banking industry veteran with enriched experience of more than 20 years. Apart from founding LoanTap and FinTech Association of Consumer Empowerment, he is an avid traveler and holds keen interest in Blogging. He has amassed profound knowledge in FinTech trends, banking, consumer trends, food and mythology which he loves sharing with others.
Satyam kumarSatyam KumarCEO & Co-Founder, LoanTap asset 8 asset 9
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