6 loan myths that have been debunked

“Just because it’s been said many times by many people doesn’t make it true”

And that’s why today, we’ll be debunking six(6) loan myths.

Let’s get to it!

Maybe in the early 1800s, this was true. The myth that banks are the only financial institutions that provide loans to individuals has been debunked a million times over.

While banks are among the financial entities that provide loans, there are several registered and recognized non-banking financial companies (NBFCs) that provide loans to individuals such as microloan companies, digital lenders, credit unions etc.

Although a poor credit score may affect the outcome of your loan application, it doesn’t ensure that your loan application will be denied.

Although your credit score is highly considered for a loan to be approved, other factors come into play. For example, lenders will also consider your age, income, the authenticity of your documents, your debt-to-income ratio, and other variables before deciding whether to approve or reject you. Here’s how you can boost your credit score.

It’s a common misconception that only salaried individuals who have a steady flow of income are eligible to apply for loans and this isn’t true.

Non-professionals, business owners, and anyone with a form of income may also apply for loans. As long as they meet the eligibility requirements of the lender, both salaried and non-salaried persons can and should apply for loans.

Another loan-related myth that has been dispelled but always rears its ugly head is the idea that all digital lenders are scammers and should never be trusted.

Loan scammers are unregistered and unethical lenders. They are unauthorized and yet always find ways to take advantage of unsuspecting individuals. But here’s the good part, If you exercise due diligence and verify a prospective lender’s legitimacy before applying for a loan, you won’t fall victim to these scammers. And on that note, here’s how you can spot a loan scammer.

Decades ago, this was true. Now, the process of getting a loan is easier than ever. All thanks to the technology of digital lenders

The age-long misconception that you must wait weeks or even months for your loan application to be processed is now a myth. Nowadays, obtaining a personal loan is as simple as filling out an online form and waiting a few minutes to a few hours for a response.

A large majority of loans these days don’t require collateral, so it’s believed that they will have very high-interest rates, and this tends to put off people from applying for loans.

In reality, the interest rate varies from lender to lender and usually depends on your credit score and many other factors. Interest loans can be as small as 3% or as large as 40%. There are no hard and fast rules to it. The factors that come into play are the determinants of interest rates.

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If you have further questions or would like to get on board your first Irorun loan, send us a message right now at support@irorun.com!