Myths of getting a loan

There are so many myths that have sprung up with regards to getting any type of loan. Below are some of the most common ones:

• I need collateral when getting a loan — We all know that this is not true, there are a good number of unsecured loan instruments that are available to any borrower. A credit card is actually a good example of a form of unsecured loan
• Banks will only award loans when the borrower really does not need the money — This plays on the difficulty of getting a loan. The truth is that if you make adequate preparations and research before applying for a loan you will have a better chance of having your loan application approved.
• Having debt is expensive – If you factor in low interest rates and the tax deductions you will get from interest related expenses you will notice that having debt is not expensive. The rule thumb you should follow is to get a loan when the interest rate is lower than the rate of return.