Have you ever considered taking out a personal loan to improve your cashflow? But you’re not entirely convinced personal loans are a feasible option? There are loads of personal loan myths out there that we are ready to debunk. Taking out a personal loan is often the solution to temporary financial strain. If you’re considering a person loan but are struggling with whether or not it is a good decision for you, read this article. Find out which personal loan myths are just that – myths!
What is a Personal Loan?
A personal loan is a cash advance that can help improve your stream of cash when you need it most. It can be used to pay bills or even consolidate unsecured debts and help you get out of debt faster. If an unexpected emergency comes up, a personal loan may be your best solution. Personal loans can really be used for just about anything. Simply apply and wait for your approval. The approval process may take some time or be more restrictive with a traditional banking institution but you can always contact BHM Financial for quick and easy access to the personal loan you need.
What is a Bad Credit Personal Loan?
Generally, bad credit or poor credit history can be the determining factor behind whether or not your loan request will be approved. Traditional banking institutions are not too keen on lending funds out to anyone with poor credit. However, at BHM Financial, we offer bad credit personal loans. That means we never base our decision on your credit. Instead, we base it on your income because we don’t think you past is always indicative of your future. If you need a personal loan to get out of debt, a bad credit personal loan from BHM Financial could be your perfect solution.
Personal Loan Myths
There are so many myths surrounding personal loans. Some are outdated and others are just plain wrong. Find out which personal loan myths we’ve debunked!
1. You Can’t Get a Personal Loan with Bad Credit
When it comes to traditional banking institution, this point may be true. But that doesn’t mean you can’t get a loan anywhere. You can easily get a personal banking loan from a private lender. These private lenders may charge slightly higher interest rates but they can secure you a loan. The BHM Financial advantage is that we work alone. That means we lend funds on our own and don’t need to get our loan requests approved by any other parties. We can get you your money quicker than most other private lenders. We’ve been helping Canadians get out of debt for years.
2. Personal Loans Are No Different than Other Unsecured Debts
Many consumers think owing money on a credit card is equivalent to owing money on personal loan. However, this is one myth that we can surely debunk for you. Credit cards are unsecured debts and carrying your balance month-to-month directly impacts your credit score, even if you make your minimum monthly payments. If you are using more than 80% of your credit limit, that will negatively impact your credit rating, as well.
A personal loan is also an unsecured loan, but paying the minimum payment each month can actually improve your score – as long as you pay on time. This can help you rebuild your damaged credit each time you make your monthly payment. Unlike a credit card, your credit score won’t be penalized if your balance is not paid in full.
3. Personal Loans Have a High Interest Rate
Yes, a personal loan may come with a higher interest rate than a secured debt. But if you owe money on your credit cards, you are definitely paying more there. You may not be completely aware of how much interest you’re paying since your debts are spread out over several accounts. If you take the time to calculate the cumulative interest you pay each month on all of your credit cards combined, you’ll be shocked to see just how much of your hard-earned money is going to interest instead of your capital.
A personal loan may seem like it has a high interest rate but when you compare it to the credit card interest you are paying, you’ll see you’re actually saving money by consolidating with a personal loan instead – even a bad credit personal loan.
4. Personal Loans Hurt Your Credit
Applying for a personal loan will have a small initial impact on your credit score. However, in the long term, it’s actually beneficial to your credit score. Simply applying for a loan will impact your credit rating but it doesn’t damage nearly as much as consumers think. Uncontrollable debt will hurt your credit score and credit history much more, especially in the long-term. If you’re avoiding applying for a personal loan to avoid further damaging your credit score, don’t waste another minute. Remember, applying for a personal loan is a short-term pain for long-term gain.
5. You Can Only Apply for a Loan for Something Specific
You can apply for a personal loan for any reason. You may want to buy a car, pay down debts, or even go on vacation. You can also take out a personal loan if you are short on cash flow for a short period of time and need funds soon. You don’t need to be applying your loan to a specific item in order to qualify. At BHM Financial, we know you have a million and one reasons for needing funds. We won’t base our decision to lend you money on what you plan to use the money for. You can use for anything from vacations to plastic surgery. A personal loan is exactly that – personal.
6. Personal Loans are Expensive
This is a personal loan myth that holds so many consumers back from solving their debt problems. A personal loan may cost more than a mortgage, but if the alternative is to pile it onto your credit line or your credit cards, you’re not saving a dime. In fact, it may even cost you more. A personal line of credit at the bank may have just as high, if not even higher, interest rates than a personal loan product. For some consumers, it may very well be the best option they have when it comes to dealing with financial difficulty. Before you get caught up in credit cash advances, find out about our personal loan terms at BHM Financial. You may be pleasantly surprised with the long-term benefit of a personal loan.
7. Personal Loan Approval Takes Too Long
There is some truth to this myth, but it’s not entirely accurate. At a traditional banking institution, you may have trouble getting a quick turnaround on your loan request, particularly if your credit profile is anything less than stellar. However, at BHM Financial, we can get your loan request approved same-day. We can even get the funds in your hands the same business day. This is because we don’t work with a third party. We are a direct lender so we can evaluate applications entirely on our own.
Another reason we can approve quickly is because we don’t waste time any time waiting for your credit report to come in. That’s because we simply don’t need it. All we need to know is your current income. We will never evaluate on your past credit history or your credit rating. We know debt can have disastrous effects on your credit and our job is to help you get out of those debt troubles for good.
8. You Need Collateral to Qualify for a Personal Loan
There are some loan products you can get with collateral. For example, you may use your home as collateral in a home equity loan. But that doesn’t mean it’s a requirement. You can definitely secure a personal with or without collateral. If you are unable to secure such a loan at a bank, you can always turn to us. BHM Financial offers personal loans with or without collateral. If you don’t want to put something you value deeply on the line, we get it. And we can still give you the personal loan you need!
9. Only Banks Can Give Personal Loans Out
This one couldn’t be more wrong. Yes, banks can give personal loans. But so can other lending companies, like BHM Financial. We don’t need to deal with your bank or your credit history to approve you either. All you have to do is fill out our online application form or meet with one of your expert financial advisors and you can obtain the personal loan you need in a flash. Banks are the biggest lenders most consumers are familiar, but they certainly aren’t the only ones available to you.
10. You Can’t Get a Personal Loan without a Job
The truth is, most people need a loan when they are out of work, or temporarily laid off. To not qualify for a loan during this most difficult time really defeats the purpose of lending institutions. This is the time when you need help and we know that. If you have temporarily lost your job, you can still apply for a collateral loan. You can also discover our loads of other personal loan products that allow you to leverage your assets to secure a loan. If you have been placed on temporary leave, we can also secure you a personal loan. We know you need the cash flow to help you get through your tough time until your job hires you back.
If you are in need of a personal loan, the best thing you can do is inform yourself with a financial expert, like our experienced staff at BHM Financial. They can help explain all of our loan products to you and help you find the product that best suits your needs. If you’re looking for more information on personal loans and what they’re all about, keep reading.
Understanding Personal Loans
If you’re considering a personal loan, here is everything you need to know about understanding how personal loans work. Now that we’ve debunked personal loan myths for you, here is more information to help you understand how they work and to help you determine if a personal loan is right for you.
Which Banks Give Personal Loans Easily?
All banks pretty much have the same criteria for personal loan approval. If you have bad credit, poor credit history, or a lot of debt, there aren’t many banks that will be willing to lend you funds for a personal loan, no matter how badly you need it. Banks take minimal risk when it comes to their financial growth so they do not give loans to any customers who appear “risky” to them. If traditional banks won’t loan you money, you still have options.
BHM Financial offers bad credit personal loans. We can help you get access to the funds you need no matter what your past credit history is like. Unlike traditional banks, we do not evaluate your eligibility on your credit at all. So, while there aren’t many banks who can help, we are lender who can definitely help you out if you are in need of a personal loan.
Do You Have Fixed Monthly Payments on a Personal Loan?
Yes, a personal loan involves a fixed repayment plan. The benefit with a lender like BHM Financial, as opposed to the bank, is that we can help you create a fixed payment that is flexible. The bank will not consider your lifestyle or your current needs. They will determine the payment period and the amount of your payments. This rigid payback system is not very accommodating for most average consumers.
At BHM, we will help you create a payment plan that still allows you to live your life reasonably well. We can help you create a plan that actually works because we want you to be able to make those payments, improve your credit score, and slowly but surely pull yourself out of debt for good!
What Are Personal Loans For?
Personal loans can be use for whatever you need. They can be use to buy a car, pay down credit card debts, fund a vacation, pay for cosmetic surgery, pay for healthcare costs, or provide cash flow for you to maintain your lifestyle during a tough period. There are no set rules for what a personal loan can be use for. Some traditional banks may refuse you depending on why you need the loan. There are certain situations they do not approve.
At BHM, we know that personal loans are very individual. No matter why you need the funds, we can assess your application and get the funds in your hands quickly. You can actually apply online right now and get approval – and you cash – in one single day!
How Do I Know if a Personal Loan is Right for Me?
The best way to figure out whether or not a personal loan is right for you is to assess your financial situation first. Calculate how much you are currently paying in interest across all of your accounts and then compare to a personal loan to see where you will save the most interest. If you do not have any other debts and are considering a personal loan, you can evaluate your income and the amount you need to borrow; Calculate how long it would take you to pay off and whether or not the payments will affect your lifestyle. If not, then you can borrow the cash.
Another way to get the right answer on whether or not a personal loan is right for, or which loan product is best for you, is to meet with a financial expert at BHM Financial. They can help you better understand all of our loan products and help you choose the loan product that works best for you. A financial expert can also help you evaluate your finances, put a budget in place, and ensure you stay on track to reach all of your financial goals.
The Bottom Line
A personal loan does have pros and cons – like everything else. But you have to base your decision on facts, not myths. The best thing you can do is inform yourself so that you can make the financial decisions that are best for you. If you are in need of a loan, get expert financial advice so you can plan ahead and not only pay off your debts, but build your financial future. Whether you need a personal loan to pay off bills, debts, or finance expenses of your choice, securing a personal loan can be a beneficial option for millions of consumers. It can also help prevent you from falling into massive credit card debt.
If you are considering a personal loan but still have questions, book a consultation or apply for a personal loan online with BHM Financial today. The answer to your debt and cashflow problems can easily be solve with a personal loan. Still not convinced? Call us today to find out how we can help.