Personal loans are a great financial product that can come in handy for a consumer that needs some extra money. You should rely on personal loans when appropriate to get the funds you need. Don't be swayed by inaccurate assumptions that are commonly made about personal loans.
The following are six things you shouldn't assume about taking out personal loans.
It will damage your credit if you take out a personal loan.
A personal loan shouldn't damage your credit unless you make late payments or default on your loan. In fact, a personal loan can be good for your credit if you make all payments on time and pay off the loan in full.
You won't be able to get loan funds right away if you take out a personal loan.
Some personal loan providers can send out loan funds surprisingly quickly. In fact, some loan providers can send loan funds directly to your bank account within hours of approval.
You can only be approved for a personal loan if you have excellent credit.
While having a very high credit score is always helpful when you're trying to take out any kind of loan, you don't necessarily need an excellent credit score to get approved for a personal loan. Some personal loan providers will lend money to those with a credit score that's only in the "good, "fair," or even "poor" range.
You can't take out a personal loan without collateral.
Some personal loans are secured by collateral such as a vehicle or a home. However, you don't necessarily have to have any collateral to take out a personal loan. Some personal loans are completely unsecured and don't involve any collateral.
You cannot take out a personal loan if you are not paid a high salary.
Your income is probably going to be an important factor when you're applying for a personal loan. Yet you don't have to earn a high salary in order to be improved. Those with modest salaries can still be approved for a personal loan as long as the lender determines that the applicant earns enough to pay back the loan.
You have to go to a bank for a personal loan.
Banks are not the only financial institutions out there offering personal loans. It's also possible to get personal loans from online lenders or private lenders. Shop around to explore your options before assuming that you have to go to a bank if you want a personal loan.Share