There are many negative connotations attached to taking out a personal loan. These range from understandable concerns to things that are just downright myths.
We’re going to take a look at many of the negative beliefs that surround personal loans, debunk them, and explain the truth behind them and specifically look at the process of taking out a personal loan with NOW FINANCE.
Before we look at the myths that surround personal loans, we should also acknowledge that even today there is still some stigma attached to them. There’s still a belief that if you take out a personal loan there must be something wrong with you, therefore if you’re thinking about taking out a loan you keep it to yourself. We have previously written about how personal loans are more common than many people think, and how to discuss finance with friends should you be thinking about taking out a loan.
Aside from being worried about what people think, the following beliefs are widespread when it comes to personal loans:
What’s the truth about all of these points?
If you take out a short-term loan then yes, your interest rate is likely to be much higher than if you were to take out a personal loan elsewhere. However, it is incorrect to say that interest rates on a personal loan will always be high. If a bank or other lender like NOW FINANCE display interest rates on their websites, they must also display the comparison rates. Therefore, your interest rate should fall into a range that doesn’t come as a surprise.
The answer to this concern isn’t as straightforward as the previous one. Each set of circumstances behind someone who is looking to consolidate their debts is different, but in general:
If, as a borrower, you use a debt consolidation for its stated purpose and don’t use it as a means of freeing up credit, it is unlikely you will end up in further debt than before you consolidated the debts.
While some lenders may perceive a loan specifically taken out for debt consolidation purposes as a potential concern, as they may assume this means the borrower could have a history of bad credit – they won’t be able to see you have taken out a debt consolidation loan but if five accounts have been cleared and replaced by one loan repayment it will be pretty clear – in general having a personal loan on your credit file won’t ruin your credit score but will affect it. While there will be implications if you don’t keep up with the repayments, just having a personal loan isn’t going to have a negative impact if you keep up with your payments and always pay on time.
Although a personal loan in isolation won’t damage your credit score, remember that lenders will look at your total exposure to debt and current access to credit, and that whatever personal loan products you currently have will be factored into any new credit history checks.
In addition to the now debunked myths that surround personal loans, there are also several benefits that people can enjoy when taking out a loan:
In addition to this, when you take out a personal loan with NOW FINANCE you can take advantage of these additional benefits:
As well as providing these benefits, the process of applying for a personal loan at NOW FINANCE has been made as simple and as hassle-free for you as possible:
Now that we’ve debunked the myths surrounding personal loans and told you about the positives of using our product, why not apply today? If you require any further information about our personal loans, please use the live chat function on our website, call 1300 275 669, or contact us here.
How could a personal loan change your life and help you get those things you want, NOW?
Disclaimer: This article contains general comments and recommendations only. This article has been prepared without taking account of your objectives, financial situation or needs. Before taking any action you should consider the appropriateness of the comments made in the article, having regard to your objectives, financial situation and needs. If this article relates to the acquisition, or possible acquisition, of a particular credit product you should obtain and consider the relevant disclosure documents before applying for the product.
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