Busting Personal Loans Myths – Kotak Mahindra Bank

Applying for loans is not a big deal today. People take loans to buy a flat, build a house, and buy a car, for education, for medical purposes, financing their business and so much more. One can also take up a personal loan for any purpose that you might need. Attractive interest rates have backed a lot of people in taking such a loan to be able to meet many daily needs such as purchasing anything at home or going for a vacation etc. Moreover, with an easy availability of personal loan EMI calculator, keeping a tab on financial inflow and outflow is easier.

Despite all of this, there are lots of misconceptions that people have regarding personal loans and there are many who are wary of applying for them. Let us take a look at some of them and the truth behind them. 

  • Personal loans are not only provided by banks, there are many NBFC’s that also provide you personal loans. You need to provide them with your basic documentation and your credit score.
  • Personal loans are quick to avail. They do not take any time to process. The approval cycle is fast when the documentation is all in place.
  • Some people tend to think that the rates of interest on personal loans are unfair and unnecessarily high. This is incorrect since the rate of interest on personal loans hover between 12% - 14%. Usually people turn to credit cards during emergencies and rates for credit cards can be as high as 40%.
  • Comparing interest rates and other factors easy. There are various websites that offer information on different institutions and banks offering personal loans and they also have prepared comparison charts to make life easier. There are personal loan EMI calculators as well to assist you in figuring out how much interest you might need to pay and which tenure of loan is advisable for you. 
  • Personal loans can be availed by NRI’s, businessmen and self employed people as well.
  • One can avail tax deductions on personal loans as well. It is an incorrect assumption that tax deduction possibilities are unavailable on personal loans. 
  • Even if your credit score is not that high you can still avail a personal loan. It might impact the interest rate at which you get the loan and there might be certain limitations but you can still get a personal loan.
  • You need not use the personal loan for personal reasons specifically. You can use it for whatever reasons, the lender is not interested about the nature of your requirement
  • You can use your personal loan to pay of outstanding debts and have only one rate of interest to take care of.
  • Don’t apply for a high amount of loan if it is not required. You will only be burdening yourself with unnecessary EMI’s to pay off. In case you default it will affect your credit score.
  • The bottom line is to not fall prey to illegitimate myths about personal loans! Calculate your personal loan EMI with a personal loan EMI calculator, opt for a loan based on your requirement figure, and meet your needs and dreams.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.