Unsecured loans, especially personal loans, are growing in popularity among Indians. The inclination towards availing of a personal loan for fulfilling diverse financial needs is increasing owing to the convenience that this loan offers. Nevertheless, misconceptions regarding personal loan persists even today.
These myths often prevent those in need from opting for such hassle-free loans. If you are looking for funds through these smart funding options.
Ensure That You Avoid Believing In The Myths Listed Below.
1 Myth: Personal Loans Come With Substantial Interest Rates
Individuals fret availing of these loans because they believe that such credit options levy considerable interest rates on the principal sum. Nevertheless, this is not true. The low interest rate on personal loans largely depends on the credit score, FOIR and other additional factors of an applicant. Thus, an individual with credit scores above 750 can negotiate for a personal loan with low interest rates. Similarly, borrowers opting for shorter repayment tenure can also take advantage of attractive rates, which reduces the interest burden on personal loans.
2. Myth: It Is Difficult To Get Personal Loans
Contrary to popular belief, availing of a personal loan is convenient and quick. Today, with the prevalence of online applications, one can initiate such loan applications in just a few minutes. Nevertheless, to improve the chances of a speedy approval, it is ideal to fulfil all the eligibility criteria for such loans. Additionally, arrange the important documents required while applying for a personal loan for fast-tracked processing. Submit all such documents along with your loan application for hassle-free approval and disbursal.
3. Myth: One Cannot Avail Of Personal Loans With Poor Credit Scores
An individual’s credit score is a crucial determining factor when obtaining unsecured loans. It measures the creditworthiness of an applicant, based on which lenders decide whether to approve or reject loan applications. Nevertheless, one can easily get a personal loan with poor credit score if he/she is willing to bear increased interest payments for the same. In such cases, lenders may not allow any negotiation regarding rates. Other ways including applying with a co-applicant, and applying for a lower loan amount also work in favors when holding a low score.
4. Myth: Personal Loans Do Not Come With Tax Benefits
In most cases, a personal loan does not provide any tax benefits to borrowers. Nevertheless, if one uses the loan proceeds to undertake home renovation or construction, he/she would be eligible for yearly tax benefits.
In the case of a personal loan for renovation of a self-occupied house, a borrower can claim up to Rs.30,000 as tax benefits, under Section 24 of the Income Tax Act 1961. Annual tax benefits of up to Rs.1.5 lakh are also available under Section 80C of the Act if the loan is utilized for the construction or purchase of a residential property.
Personal loans from lenders such as Bajaj Finserv also come with a high principal sum of up to Rs.25 lakh. Eligible candidates can take advantage of competitive interest rates on their offering.
The NBFC also simplifies and accelerates the lending process through their pre-approved offers. These offers are available on a range of secured and unsecured financial products, including personal loans and business loans. You can check your pre-approved offer by submitting your contact number and full name.
Before loan application, one should clear all doubts and misconceptions regarding these loans. Additionally, using a personal loan calculator can help in determining the most suitable loan quantum, tenure and interest rate on these forms of credits.