I’m a Financial Expert: 6 Biggest Myths About Personal Loans

Core Insights - Personal loans are often misunderstood, leading to myths and misinformation about their availability and terms [1][2] Availability of Personal Loans - Contrary to popular belief, personal loans are widely available from various sources including banks, credit unions, and online lenders [3][4] - Many lenders utilize streamlined digital applications and automated underwriting systems, making the approval process more accessible [4] Interest Rates - While some personal loans may have high interest rates, especially for borrowers with poor credit, competitive lenders offer APRs in the single digits for those with solid financial profiles [4][5] - Fixed-rate personal loans can be a cost-effective alternative to revolving credit card debt, which typically has average APRs exceeding 20% [5] Collateral Requirements - Providing collateral can help secure a lower interest rate, but it is not a strict requirement for obtaining a personal loan [5][6] - Unsecured loans are available, allowing borrowers to avoid risking their assets [6] Credit Score Myths - A common myth is that only individuals with excellent credit can qualify for personal loans; however, borrowers with average credit scores (mid-600s) can often secure loans if they have stable income and manageable debt [7] - Credit unions and fintech lenders may approve applications for those with limited or poor credit, indicating a less restrictive lending environment [7]