4 Personal Loan Myths That You Should Stop Believing

There are situations when extra money is needed. Whether your loved one passed away, a disaster hit your home, or you got involved in a car crash, you require additional funds to cover unexpected expenses. The good news is there are various financial solutions you can choose from, like a personal loan.

Personal loans provide borrowed money that can be used for almost anything, from debt consolidation, home remodeling to luxurious vacations. It is paid back in monthly installments over 2-6 years. Although there are plenty of benefits, most benefactors commonly misuse personal loaning. To stay well-informed about it, here are several personal loan myths you should stop believing:

Myth #1: You need a high credit score to get approved

Credit score plays a significant role in determining whether you are eligible for a loan. But when it comes to applying for a personal loan, many financial institutions consider various factors, like income, outstanding debts, and repayment capacity.

Just because you have an unfavorable credit score does not mean your personal loan application will automatically get rejected. There are personal loans for bad credit. Since most lenders will truly assess your financial standing, consider giving it a try. Keep in mind, though, that you are likely to have a higher interest rate.

Myth #2: The processing time is time-consuming

Getting approved for a personal loan takes a long time for some lenders, banks, and credit unions. Because of this, many borrowers believe that the processing time for loan applications can be very long and time-consuming. Some financial institutions also utilize a paperless process that does not require submitting physical copies of any documents.

If you need a personal loan in Bessemer and decide to reach out to us, your loan application will be fast and easy. Our team will get back to you within 24-48 hours of receiving your information via an online application. Meanwhile, it takes only less than one hour to discuss your needs, decide on a loan, verify information, and pick up a check when you visit our branch and talk with one of our team members.

Myth #3: Personal loans are only for certain types of people

Many borrowers are hesitant to apply for a personal loan because they think only salaried individuals can apply. On the other hand, the skeptical ones mistakenly assume that it is only for those who have no other choice. The truth is this financial solution appeals to a large group coming from unique financial backgrounds.

For salaried individuals, their loan application is easier to be approved because they have a steady flow of income. However, those who are self-employed can also apply for this type of loan. The loan amount is based on their credit history.

Myth #4: You require collateral

There are two types of personal loans: with collateral (secured) and without collateral (unsecured). If you choose to apply for a loan requiring collateral, your credit score, income, and loan size will be assessed.

Conclusion

Personal loans can be the right financial solution for taking control of your finances. Just keep the information above in mind and stop believing the myths mentioned to make an informed decision regarding your loan application.

If you need installment loans in Bessemer, contact Bessemer Finance. Unlike other loan options, we offer personal installment loans that let you borrow the money you need based on your overall financial situation. We have same-day loans available ranging from 202 to 1,491 dollars. Apply now!

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