Personal loans – a look at the common myths

The one thing that we can all agree on is that applying for a personal can be a daunting task especially if you are doing it for the very first time. The situation is further compounded with the misinformation propagated by individuals out of ignorance or simply illiteracy. You simply need to do a small search online to get a glimpse of the myths regarding personal loans being thrown about. While there is nothing wrong with people having a skewed opinion, the worst case scenario is when UK citizens take these myths and misconceptions as gospel truth.

Today, we are going to shed light on some of the common personal loan myths in the hope that you can make an informed decision when applying for secured or unsecured loans.

Personal loans are not for individuals with a poor credit score

The general belief is that personal loans are only for individuals with a perfect credit score. This is a myth and nothing near the truth. The truth of the matter is that anyone can apply for a personal loan their credit score notwithstanding. The only good thing about having a good credit score when applying for a personal loan is that you get to enjoy favourable interest rates as compared to a person with an average credit score.

The only place you can get the best personal loan is from a bank

Unfortunately, most people believe that to get the best loans, one needs to apply for the same from a bank. This is nothing more than a misconception and a myth. Different banks have different interest rates that they apply when a person borrowers. However, the idea that one can only get access to credit facilities from a bank is misguided. With the proliferation of online lenders and peer to peer lenders, applying for a personal loan has never been easier.

Taking loans will only burden your debt situation

Think of it. If you have more debt, it doesn’t make sense to take out more debt right? After all, taking out more debt will simply aggravate your debt situation right? However, this is not always the case or rather is a myth of sorts. You can actually apply for a new loan in order to refinance existing loans.

Applying for personal loans is complex

No doubt, if you have a poor credit score, personal loan application from a high street bank might seem complex. In fact, a number of banks require heavy paperwork not to mention screening and the like. However, if you have all the information and paperwork in order, applying for a personal loan should be a simple process. It need not be complex as many people like to think.

In conclusion, don’t listen to myths associated with personal loans. Always ensure you make an informed decision when applying for personal loans.