Urgent Personal Loan: Common myths and facts you should know

Financial emergencies never come with a warning. In such situations, an urgent Personal Loan can be a lifesaver, giving you access to funds quickly and conveniently. However, despite being one of the most widely available forms of credit today, there are many myths surrounding Personal Loans. Many potential borrowers hesitate or make uninformed choices because of myths they have heard. Let us understand Personal Loans better:

Small Loan amounts

Many believe that urgent Emergency Loans are limited to just a few thousand rupees. While small Loans are available, lenders offer urgent Personal Loans up to Rs. 30 lakh, depending on your income, credit score, and repayment capacity. So, whether you need a small sum or a larger amount for significant expenses, urgent Personal Loans can cater to both needs.

Longer repayment tenures

A common misconception is that urgent Personal Loans must be repaid quickly, within just a few months. Most lenders provide flexible tenures ranging from 12 months to 60 months*, letting you spread repayments over a comfortable period.

High hidden charges

Borrowers often worry about hidden costs, whether Personal Loans will involve steep processing fees or undisclosed penalties. Reputed lenders, however, are bound by RBI guidelines to maintain transparency. When applying, most lenders disclose the processing fee, interest rate, prepayment charges, and penalty clauses upfront.  

Documentation is complicated

Another myth is that Urgent Personal Loans require extensive paperwork. In truth, the rise of digital lending has made documentation much simpler. Most lenders require identity proof, address proof, income proof, business proof, and bank statements from the past 6 months. These can often be uploaded online, enabling approval and disbursal in just a few hours.

Collateral is mandatory

The most significant advantage of urgent Personal Loans is that they are unsecured. Unlike Home or Gold Loans, you need not pledge any asset as security. Approval depends on your creditworthiness and repayment ability, not collateral. This makes them particularly useful during emergencies, when arranging collateral might not be practical.

No minimum income requirement

Some borrowers assume that anyone can get an Urgent Personal Loan, regardless of income level. While lending firms do not demand extremely high salaries, they do expect applicants to show consistent income. The minimum income requirement for salaried individuals in Mumbai and Delhi is Rs. 25,000 and Rs. 20,000 per month, respectively, for those residing in other cities. A self-employed individual should have a minimum annual turnover or yearly profit.

Time-consuming

Many hesitate to apply, fearing that Loan approvals involve delays and long waiting periods. Thanks to digital processing, lenders can now verify details quickly and transfer funds.

Conclusion

Financial emergencies require quick action, and urgent Personal Loans help you in emergencies. Unfortunately, myths around Personal Loans prevent people from using them confidently. The truth is that with responsible borrowing and timely repayments, an urgent Loan can help you build a stronger credit profile for the future.