So, you might have some pending home improvement projects that you can’t wait to start or an upcoming trip that you cannot cancel and you need money for. There could be a hundred reasons for you to take a personal loan, but you’re held back by some of the myths that you have heard about this type of financial assistance.
Of course, it wouldn’t hurt to be extra careful when you are making big financial decisions like getting a personal loan. However, it also wouldn’t help you to believe baseless myths that could get in the way of you doing things you need to do. In this article, we will share four personal loan myths and the truth behind them so that you can make a sound decision:
Myth #1: The Process of Getting a Personal Loan Is Too Complicated
This is not true at all. In fact, a personal loan may be one of the easiest loans to apply and get approved for! What you need to do is to apply with your top three or five choices of lenders that do a soft credit check for the initial checking so as not to hurt your credit score. Compare their offers and go for the one with the lowest interest rate. Make sure you check for other fees, too. Once you decide on the lender, you will need to provide the information they require and wait for your approval––it’s that simple!
Myth #2: You Can’t Get a Personal Loan If You Don’t Have Excellent Credit
One of the longest-standing myths about a personal loan is that you can only apply if you have an excellent credit score. Here’s the truth: if you have a good credit score, you will get better offers with lower interest rates. However, even if you have a poor credit score, you can still be eligible for a loan. There are even lenders whose specialty is personal loans for people with poor credit. The caveat is that you are likely to pay a higher interest rate.
Myth #3: You Can Only Have One Personal Loan at a Time
While not recommended, it’s possible to have more than one personal loan at a time. Just make sure that you earn enough to pay for both. When you are able to make payments on time, there should be no problem when you apply for a new one from your lender. And given that you have a good record with the lender, you’ll probably get approved faster, too.
Note that it’s possible that there would be collateral if you consistently miss payments. So, make sure to not enter a secured loan unless you are completely sure you can pay on time!
Myth #4: Personal Loans Are Extremely Expensive
Yet another popular myth about personal loans is that they’re highly expensive––that’s false. In fact, personal loans are among the cheapest financial products that you can get today. It’s because they are available from different sources, including banks, credit unions, and now even online lenders, so the competition is tough. Presently, you can get personal loans with interest rates as low as 2.5% if you have a high credit score. This means that you can get a personal loan with an interest that is significantly lower than what you would get when you use your credit card.
Personal loans can be helpful to people who need instant money for unexpected expenses or for those who are trying to improve their credit scores. The myths mentioned above should not keep you from applying for one. The only thing that you should be aware of when you’re applying for a personal loan is that it can be a burden to you financially. For this reason, always consider your expenses and your income before you get any loan because when you miss payments, your credit score will be affected!
It also matters where you get a personal loan. You want an honest lender who will offer you the best possible loan conditions, and that’s exactly what Shelby Finance Company can do for you. Contact our loan experts from Memphis, TN, and find out about our personal loans today!