Credit Myths That Need to Be Unfriended ASAP

Bengaluru: For many young Indians, “credit” remains one of those confusing financial topics that never quite made it into the classroom. As a result, myths and misconceptions continue to shape how Gen Z and early professionals perceive borrowing. According to mPokket, a digital lending platform focused on empowering young professionals, this lack of understanding often prevents people from making informed and confident financial choices.

One of the most common myths is that loans are meant only for emergencies. In reality, users increasingly take instant personal loans to meet planned goals, from funding a certification course to starting a side hustle or managing a big purchase smartly. Far from being a panic button, a quick loan through a trusted platform can actually be a tool for growth and opportunity.

Another widespread belief is that borrowing hurts your credit score. The opposite is true when repayments are made on time. Timely EMI payments demonstrate financial responsibility and can significantly improve one’s credit score. For new borrowers looking to build a financial foundation, this is among the most practical ways to strengthen creditworthiness early on.

Many people also confuse credit cards with loans, assuming they work the same way. But the two are quite different. Credit cards offer revolving credit, allowing you to borrow and repay multiple times, while personal loans provide a fixed amount repaid through scheduled EMIs. Understanding this difference helps borrowers make smarter decisions depending on whether they need flexibility or structured repayment.

The notion that only high-income individuals qualify for loans is another outdated perception. With new age digital lending platforms, access to credit has become more inclusive. Digital lending apps now assess repayment behavior, income stability, and responsible financial habits rather than focusing solely on salary size. This has made it possible for gig workers and young professionals with modest incomes to avail personal loans without collateral, in amounts they can comfortably manage.

EMIs, too, often get a bad reputation as financial traps. In truth, it encourages borrowers to view EMIs as a budgeting tool rather than a burden. When planned correctly, EMIs allow large expenses to be spread out over time, helping individuals manage aspirations and affordability hand in hand. It’s not the EMI itself that’s the issue, it’s poor planning that turns it into one.

Perhaps the most persistent myth is that borrowing money signals financial weakness. In reality, responsible borrowing reflects awareness and independence. Taking a personal loan through a credible platform or using instant credit online shows that you are actively managing your finances and leveraging available tools to move ahead.

Ultimately, credit isn’t the villain in your financial story, misusing it is. With the right planning, responsible repayment, and support from platforms like mPokket, young earners can build financial confidence, seize opportunities, and create a more secure and independent future.