Debunking 4 Common Personal Loan Myths
Updated: Nov 8, 2021
Personal loans make it possible to cover unexpected expenses—be it pressing emergencies like medical needs or something more flexible such as a helping hand to a friend in need. They’re not as demanding as their other heavy-hitting counterparts like a home loan, but the wonder of personal loans is that you have more freedom to do things when you’re strapped for cash.
Unfortunately, personal loans get a bad reputation since most people believe they can trap you in a money pit. These misconceptions can prevent people who need financial aid from finding the right solution to push them out of their monetary struggles; that’s why it’s important to bust these personal loan myths so you can make wiser decisions about your finances moving forward.
Debunking Common Personal Loan Myths
Myth #1: Personal Loans Have High-Interest Rates
Since personal loans offer a quick way to pay for bills, emergencies, or even a push for a small business idea, it’s common to see people think that it comes with high-interest rates. However, your credit score and history will be the ones to influence your interest rates, so don’t think that it’s automatically due to personal loans.
The right lender will offer personal loans with competitive rates, and in fact, most are more affordable than credit cards or unsecured loans.
Myth #2: Getting a Personal Loan will Hurt Your Credit Score
Getting a loan doesn’t automatically mean you’re financially irresponsible—what lenders check is your ability to make timely payments. So long as you can keep up with your monthly obligations, then getting a personal loan won’t compromise your credit score in any way!
Myth #3: You Need a Good Credit Score to Get a Personal Loan
Having a good credit score can indeed give you more loan options with favorable terms and interest rates, but it’s possible to get a personal loan even if you have a low credit score. You only need to find the right lender who offers looser requirements, though other qualities can also boost your chances of getting a loan, such as your income, employment history, and debt-to-income ratio.
Myth #4: It Takes a Long Time to Pay for Personal Loans
Loans generally take a long time to complete, but personal loans are one of the fastest yet safest ways to borrow money. They’re not as aggressive as quick loans, plus you have the option to pay them off in monthly or yearly installments. Personal loans generally range from 6 to 36 months, so it’s up to you how you want the terms to play out and whether it suits your lifestyle.
The Bottom Line: Debunking Misconceptions About Personal Loans
The thought of taking out a personal loan sounds scary for many people, but it can be an excellent way to push through a financial crisis so long as you work with the right lender who can offer you rates that match your financial capabilities. When you unlearn these misconceptions, you can make more informed decisions if you ever need to take out a personal loan down the line.
How Can Opelika Finance Help You?
If you're looking to build or rebuild credit, consolidate bills, or if you're caught in a financial bind, it's best to work with a company that can provide you with a simple and quick borrowing option.
Here at Opelika Finance, we understand the time-sensitive need for help when it comes to funds. We create same-day loans ranging from $202 to $1491 with clear, fuss-free, and simple repayment plans. Let's create a personal loan for you today!