5 Myths About Personal Loan for Salaried Engineers

Personal loans account for 96% of the total lending market in India. It grew at a rate of 20.4% between February 2017 and 2018. The total amount of such loans stands at Rs. 576,600 Crore at the end of the fiscal year 2018.

Despite their popularity and availability plenty of incorrect information and myths surround these financial products. These are especially evident in case of specific types of credits like a personal loan for salaried engineers.

What is a loan for engineers?

Personal finance for engineers is a type of professional loan tailor-made for salaried engineers. These are offered by various financial institutions including NBFCs all across the country.

A salaried engineer can avail up to Rs. 25 Lakh as credit with these loans. Engineers from computer science, IT, civil, mechanical, electronics, electrical, or any specialisation can apply for these loans. It provides the necessary financial backing to meet large scale expenses like home renovation, vacation, family events, further education cost, medical emergencies, etc.

Several misconceptions about personal loan for engineers exist in today’s financial market. Let’s take a look at some of them.

Myth #1 – These loans take a long time to process

Fact – Personal loan for salaried engineers usually get processed within 24 hours. The online application, minimum documentation, and quick verification process ensures an application for credit is submitted, verified, approved, and disbursed within the shortest time frame.

Myth #2 – Only Government-backed financial institutions offer these credits

Fact – Both private and public sector financial institutions offer personal loan for salaried engineers to eligible applicants. Studies show that private lenders including NBFCs have disbursed a significant number of such credits.

Myth #3 – A personal loan negatively affects credit rating

Fact – Responsibly handling the credit can significantly improve the borrower’s credit score. Their credit rating will improve if he or she makes timely repayments, do not default on the debt, keep their FOIR within the recommended (30% to 50%) limit. Credit bureaus will consider that the individual is responsible with their finances which will increase their creditworthiness. Financial experts often recommend taking short-term finance as one of the methods for engineers to increase their CIBIL score. 

Myth #4 – One can apply for another loan immediately if a request is rejected

Fact – An applicant should wait for at least 6 months before applying for a new line of credit. If you think you have engineer loan eligibility, then you can apply for it. After that financial institution issues an enquiry to credit bureaus whenever someone applies for a loan. Too many requests for enquiries will negatively affect their credit rating. Lenders will consider that individual as credit-hungry, and their application for a personal loan for engineers may get rejected.

Myth #5 – These loans have the highest interest rates

Fact – Personal loan for salaried engineers have a competitive interest rate. It may be higher than secured credits like home loans, but it is generally lower than any other types of unsecured loans.

One of the most common uses of personal loan for engineers is debt consolidation. If you have that often you can use this credit to consolidate high-interest debts (like credit card bills). Its affordable engineer loan interest rate reduces the total payable amount and combining different loans eliminates chances of defaulting.

An applicant should do proper market research before selecting a loan tailor-made for engineers. Understanding and avoiding these above mentioned myths is necessary before availing a personal loan for salaried engineers to avoid any issues in future.

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