We are in the XXI century, 2021. But even now, there are a lot of loan myths and rumors that are running down the streets. You can hear people gossiping about how they were scammed by lenders and other bad financial situations.
The truth is, that this can happen, yes. But it can only happen to you if you are dealing with off-the-record lenders that don’t follow the US financial rules.
Even though, people are still thinking that they can get somehow scammed by official lenders such as banks or credit unions.
So, here in Oxford Funding, we want to show you 5 loan myths that aren’t letting you get the loan you need today.
One of the most common misconceptions is that all loans have high-interest rates. But in reality, interest rates will vary according to different factors such as:
- Your credit score.
- Monthly income.
- Previous debts.
- Credit history.
- The type of loan.
- The use of collateral as a warranty.
For example, a personal loan is cheaper than a payday loan or other instant loans. And lenders will present to you better deals if you can prove to them in your loan application that you are a trustworthy person with a good credit history.
Also, the amount of money you are borrowing can also affect the interest rate of your loan. So, before requesting one, ensure yourself that you are asking only for what you actually need.
Even though a good credit score is a way to improve your odds of getting a loan, it’s not a written-in-stone requirement.
You see, there are a lot of regulated lenders that are able to borrow money with a poor credit score or even with no score at all.
Of course, they will consider other factors such as those mentioned above, including your debt-to-income ratio (DTI).
If those criteria can offset the credit score requirement of the lender, you will be in a good position when it comes to having approved or denied your application
Back in the day, lenders could take days or even weeks to have an answer for your loan application. They needed to check a lot of files and contact bureaus before making a decision.
So it’s normal that people are still thinking that lenders can take a lot of time in the loan process.
Now, since all our information is digitalized, they can actually check all your financial information within minutes and make a decision in a matter of hours.
So, you can potentially have your money deposited in less than an hour once your application is approved.
However, if you are consulting with a well-known lender, you will need to wait because of the number of requests they get on a daily basis.
People are afraid that online lenders are using their financial information as a database to sell it to other companies.
The truth is that regulated online lenders can’t sell or use your information for anything else that is not related to your loan application. They follow the Consumer Data Protection Act, which provides you an extra layer of protection when it comes to your personal information.
However, dealing with platforms that aren’t regulated is something different because you don’t actually know what they do with your data.
Loan myths are a common belief in the US population but are only that, myths.
Once you overcome this fear, you will be able to get the loan you wish in the lender you are looking for.