5 Myths and Actual Facts About Personal Loans That You Should Know
In today’s fast-paced world, personal loans have become one of the most convenient financial tools to meet urgent needs—be it medical emergencies, weddings, travel, or education. However, many people still hesitate to apply because of lingering myths surrounding personal loans.
At Vizzve Financials, we’re committed to empowering our users with accurate financial knowledge. Let’s break down the top 5 myths about personal loans and uncover the facts you need to know.
🧠 Myth 1: Personal Loans Are Only for Emergencies
✅ Fact: They Can Be Used for Multiple Needs
Many assume that personal loans are strictly for emergencies like medical bills. However, personal loans are versatile and can be used for:
Debt consolidation
Travel
Home renovation
Higher education
Starting a small business
💡 Pro Tip: Always plan your repayment, regardless of the reason for taking the loan.
🧠 Myth 2: You Need a Perfect Credit Score to Get a Personal Loan
✅ Fact: Many Lenders Accept Moderate Credit Scores Too
While a higher credit score (750+) improves your chances of approval and lower interest rates, many NBFCs and digital lenders, like Vizzve, offer personal loans to those with moderate or improving credit scores.
💡 Tip: A steady income and low existing debt can still get you a good deal.
🧠 Myth 3: Personal Loans Have Extremely High Interest Rates
✅ Fact: Interest Rates Are Competitive and Vary by Profile
Personal loan rates are not “sky-high” by default. Lenders assess:
Creditworthiness
Income stability
Employment type
Repayment history
With a strong profile, you can avail personal loans at rates as low as 10%-12% annually.
🧠 Myth 4: Only Salaried Individuals Can Get Personal Loans
✅ Fact: Self-Employed Individuals Are Eligible Too
Gone are the days when only salaried employees could access personal loans. Self-employed professionals, freelancers, and business owners can also qualify based on their income proofs, bank statements, and credit behavior.
💡 Tip: Keep your ITR filings and bank records updated.
🧠 Myth 5: Taking a Personal Loan Hurts Your Credit Score
✅ Fact: Timely Repayment Can Boost Your Score
While a hard inquiry might temporarily lower your score, repaying your personal loan on time can significantly improve your credit profile. It demonstrates financial discipline and builds trust with lenders.
💡 Avoid missed EMIs or loan settlements to protect your score.
❓FAQs
Q1. Are personal loans risky?
A: Not if you plan your repayment well. Choose trusted lenders and avoid borrowing beyond your means.
Q2. What documents do I need for a personal loan?
A: Basic KYC (Aadhaar, PAN), income proof (salary slips or ITR), and bank statements.
Q3. Can I repay my personal loan early?
A: Yes. Some lenders charge pre-closure fees; others like Vizzve offer flexible options.
Q4. Will a personal loan affect my home loan eligibility?
A: Yes, if your EMI burden increases. Maintain a healthy debt-to-income ratio.
Q5. Is it safe to take personal loans from digital platforms?
A: Absolutely, if the platform is RBI-regulated and transparent like Vizzve Financials.
Published on : August 3RD
Published by : Kaushik
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