06 August 2019
When considering personal loans as a potential borrowing option, it’s useful to know the truth about them and whether they’re the most suitable option for you.
There are some common misconceptions about personal loans, so it’s time to put them to bed and get to know the facts.
Myth 1: Loans will negatively affect my credit score
Taking out a personal loan does not reflect badly on your credit score, in fact the complete opposite is true if the loan is managed well. But in order to ensure that you receive a potentially positive impact to your credit report and score from taking out a personal loan, you must make regular repayments on time in order to maintain and potentially improve your overall credit history.
Taking out a personal loan has nothing to do with impacting your credit score in a negative way. It is defaulting on your regular even monthly repayments that will reduce your creditworthiness, which in turn could cause you problems in the future. On the other hand, if you are punctual and consistent with your personal loan repayments, you are proving that you are financially responsible and that your income is constant and reliable. This does not negatively affect your credit score, as you are proving to your loan provider and other potential credit providers that you are able to make repayments.
Myth 2: I don’t have a chance of being considered for a loan with my poor credit history
It is a common misconception that you need a high credit score in order to be considered for a personal loan. This is often not the case. You can be approved for a short-term loan with or without a high credit score. A lot of online personal loan providers, including buffa, don’t require you to have a high credit score in order to approve you for a loan. Specialist lenders such as ourselves will review your circumstances on a case by case and we will always do our very best to provide you with a suitable sum of credit that we feel you can successfully manage the repayments for.
Myth 3: Personal loans are hard to apply for
Many people may still fear that the process of taking out a personal loan could be an overwhelming and complex one, with a drawn-out delay before receiving a final decision and ultimately their loan, when this is often not the case. In reality, applying for a personal loan online with a lender such as buffa is as easy as A, B, C. When applying with us online, all you need to do is fill out a simple loan application form which asks you some key personal details and requires some information about your current financial situation. Then if you’re approved, the loan funds could be in your account on the very same day.
Myth 4: There are hidden fees designed to catch you out
Another common fear about personal loans is that there are lots of hidden fees that are put in place to catch you out when either taking out or paying back your loan. Whilst some lenders do charge additional fees that are associated with their loan, this is one less thing to worry about with buffa. We don’t charge any application fees, late or missed repayment fees, or any other fees for that matter (other than the loan interest of course).
It is important of course to consider the interest rate and repayments that are required for any loan which you choose to apply, as well as any potential late payment fees that you may incur as a result of any missed or late repayments. As long as you ensure your repayments are made in a timely and consistent manner, then you should not face any unexpected fees, but it’s always sensible to make yourself fully aware of the full loan terms and conditions before you proceed to fully take out a loan with any provider.
Myth 5: Loan companies do not care about me or my best interests
Finally, there is the common idea that loan companies do not care about you or your best interests and are just interested in making money. Although you or someone you know may have had bad experiences in the past with personal loan providers, we’d strongly advise you to not assume all loan providers look or act in the same way. We fully appreciate that others in the industry have got it wrong in the past, and we’re determined to make sure that we behave in a manner towards our customers that’s fair, clear, responsible and understanding.
At buffa, we only approve new customer loans if we believe customers are fully capable of sticking to a repayment schedule that we agree and detail with them prior to taking out a loan with us.
So, now we’ve cleared up some of the myths surrounding short-term personal loans, we hope this helps you to make a decision as to whether they may be the most suitable borrowing option for you. If you require any further information, you can read a bit more about our buffa story so far and who we are here.