WHEN I started earning money, I began putting more value on my hard work, the importance of saving, and of course, making sure that my money is safe.
This is why I find banks generally helpful when it comes to keeping my money safeguarded, not only from the possibility of having it stolen but even from myself spending it!
When my money is safe in the bank, I do not have the convenience of getting and splurging it so it stays right there – safe and even growing.
One of the benefits that I particularly find helpful from banks is the opportunity to take part of bank loans – and this is what I want to talk to you about.
I’m sure you’ve already come across the idea of bank loans, whether it’s personal loans, home loans, or business loans – the idea is that the bank lends you money which you can repay in specific terms with specific rates depending on several factors such as your credit score, current account status, and many others.
For some people, these can sound intimidating so they begin to ask: “Am I qualified to apply for a bank loan?”; “What does a collateral mean?”; “Can the bank grant me a business loan even when I don’t have the specific idea yet?”
The questions continue to come.
The sadder part on why people choose to shrug off the idea of bank loans is because they’ve already come across some myths about bank loans.
For instance:
“Bank loans are only available for the middle to high-class educated people, it’s not for me.”
It can be terrifying when you take on something you literally have no idea about. And while most people think bank loans are only for “the rich,” it is actually open for all.
For as long as you meet the necessary requirements of the financial institution, you are able to meet the agreed repayment terms, you have a stable and regular source of income that’s regularly getting into your account, and you have good credit score, you can always explore the idea of taking on bank loans.
“I will just use my savings instead of taking out a loan for my business so I won’t get into debt.”
Again, it can be intimidating when you take a certain action that you are not quite sure and familiar with. For instance, people who have businesses are mostly afraid to take on business loans from banks because of the fear of getting into debt, so they end up using their personal savings for their business.
And while that’s OK, it could also be risky when you eat into your own savings to sustain the health of your business. In the unlucky event that your business fizzles out, not having any savings to help you get back on track can cause further financial struggle.
“Applying for a bank loan is very tedious, I’ll only be wasting time.”
Thanks to technology, applying for bank loans has been made so accessible to everyone. Most banks already accept online loan applications, which means a few clicks here and there and there’s your application.
You will also be informed of what specific requirements you need to comply such as a valid identification of certain statements of accounts. You will be given a checklist to follow and complete.
“I need a high credit score to qualify for bank loans.”
As a matter of fact, even with a low credit score, a bank can still grant you a loan but you may need to repay in higher interest rates.
“The interest rates are crazy high, there’s no way I can afford paying it.”
The interest for repayments is calculated based on several factors, including your capability to pay the loan. The best way to ascertain if you can afford paying the loan is by asking the bank for a computation of your payment options in case you decide to take out that loan.
There are so many myths about bank loans that can get us all doubtful and afraid that is why it is important to learn, ask questions to the right people and get educated about bank privileges that we can take advantage of such as bank loans. Don’t let myths stop you from learning and discovering in your financial journey.
THINK. REFLECT. APPLY.
Have you considered the idea of taking out bank loans?
What made you go for it? Or not go for it? Why is it important to learn and discover facts about bank loans instead of simply believing myths about them?
