Personal loans get a bad rep. Tell people you have a mortgage and few will bat an eye – they might even congratulate you. But mention personal loans and the reaction will often be very different. Why is this so?
One reason could be that personal loans are (wrongly) associated with poor financial management or even unlicensed money lenders and loan sharks. Sensationalised stories about irresponsible borrowers getting into debt with loan sharks to feed their gambling addictions don’t help either.
But the reality is a stark contrast. Personal loans are a financial tool like any other, and you can use them responsibly to your great benefit (“good debt”), or irresponsibly to your great detriment (“bad debt”). Here to bust the top 6 personal loan myths:
- Personal loans are bad for my financial health
- You can’t get a personal loan if you don’t have a fixed salary
- If you qualify for a personal loan, you should always apply for more than you need
- You need to provide collateral to get a personal loan
- Don’t bother applying for a personal loan if you have a low credit score
- Applying for personal loans is a tedious and time-consuming process
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