By Ella Mason, freelance writer
Finance frightens many people, and it’s easy to see why. When getting a loan, you are often taking on an amount of credit that you’d never have access to as one lump sum.
If you are the sort of person who worries about money – and one in six of us do have financial problems – then it’s easy to allow yourself to believe the common and myths and misconceptions that persist.
Below are five common myths around purchasing a loan:
1. It takes ages to get the money
Getting a loan doesn’t mean that you have to go begging-bowl-in-hand to the bank manager. You can head online, make an application and get the funds delivered in a day or so. Technology has made this a much swifter and simpler process – just don’t get carried away.
2. I’ve got no credit history so I’ve got no chance
Credit history isn’t the only factor affecting your loan application. If you can prove that your finances are stable and, crucially, that they will continue that way for the foreseeable future, then you can still convince lenders to part with their cash.
You don’t need to use a house as equity to get a loan. Numerous lenders offer loans that don’t have to be backed by a home, car or any type of collateral
Equally, as MoneySuperMarket states, young people shouldn’t confuse ‘no credit’ with ‘poor credit’. Having no credit history can stop you getting access to the best deals but not necessarily as much as having a poor record.
If you have no history then you must ensure you are on the electoral register – at the very least lenders can see you are who you say you are – and look to take a modest amount of credit, when appropriate, that can be paid back to prove your standing as a reliable borrower.
3. I need a house to get any money
You don’t need to use a house as equity to get a loan. Numerous lenders offer loans that don’t have to be backed by a home, car or any type of collateral.
These type of loans are terms as unsecured – these are issued solely on the borrower’s ability to meet the repayments.
4. If I’m in debt, surely the last thing I should do is get another loan?

Ella Mason
It is true to say that you shouldn’t just keep digging if you get yourself into a financial hole. However, if you find yourself with a number of different debts on different terms then you might find it useful to take a debt consolidation loan.
This can bundle all of your debt up into one repayment so you only have to keep track of one date, one interest rate and one end goal. Make sure your monthly payments and interest rate will go down, otherwise this is not for you.
5. I have a score which will affect my ability to get a loan
There isn’t just one neat and tidy credit ‘score’ out of 100 sitting in a file somewhere that tells people whether or not they should lend to you. Different lenders use different criteria to come to their judgement.
Three agencies do hold information on you and you should check this to make sure it is correct, as it will feed into your rating in the eyes of potential lenders.
About the blogger
Ella Mason is an experienced freelance writer.
She specialises in providing useful and engaging advice to small businesses.
Follow her on Twitter here.