Whenever you are in need of emergent funds, personal loans are always on your rescue. Whether it is that big fat wedding that needs to be funded, a medical exigency that needs financial support or a personal obligation; personal loans have always been there to help you meet your financial needs. However, there is still some financial stigma amongst a large section of borrowers who shy away from personal loans.

Here are some of the personal loan myths that we will debunk for you:

✔ Personal Loans Have the Highest Interest Rate – If you have ever revolved a balance on your credit card, you will know that this myth is far from the truth. When you compare the rate of interest charged by credit card companies on your revolving line of credit, you will know that personal loans are by far much more reasonable credit option. These days, you can easily avail a personal loan for as low as 10% rate of interest per annum. The bottom-line is that the better your credit score is, the better chances you have of gaining one of the lowest interest rates in personal loans.

✔ Personal Loans Do NOT require any collateral – Unlike other loans such as home loans, business loans, etc., personal loans are sanctioned without the need to provide any form of collateral or security to the bank.

✔ Personal Loans Are Only For Salaried Class - Personal loans are given to salaried, self-employed individuals as well as self-employed professionals. Even non-resident Indians can also benefit from personal loans in India, provided they submit all the relevant documents to the bank.

✔ Personal Loans Are Approved Only For People With No Existing Loans – One of the most common myths about personal loans is the notion that only first-time borrowers or ones that have no other existing loan are eligible. Personal loan keeps into consideration your monthly income, your repayment history, your expenses and other loans that you pay and then come up with the best loan option for you.

✔ Personal Loans Not Provided To People With Bad Credit Score – While a good credit rating is important to getting the best personal loan offer, a bad credit score does not hinder your eligibility. A bad credit might affect the rate of interest you will be given for the loan and there may be certain limitations, however, personal loan eligibility does not consider a bad credit as a sole reason for rejection.

✔ People With Bad Credit Need To Submit A Collateral - Personal Loans are unsecured loans and collateral is not required for personal loans. So the notion that a bad credit will require you to produce collateral to the bank is a myth. Collateral is only required for secured loans such as a home loan, car loan, etc.

We at Letzbank remain sanguine that we will make all efforts to guide you that you make the right decisions and help you in that hour of need. We want to keep up the goodwill of our customers - because we value our relationship with you.

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