6 Surprising Myths About Personal Debt

There are a lot of misconceptions about personal debt. Unfortunately, that leads many people to make wrong financial decisions. If you’re facing a financial emergency, learning more about personal debt and how line of credit loans work is essential. Knowledge is power. Keep reading to discover how personal debt works, so you can manage your money well and make intelligent, informed choices.

Six Shocking Personal Debt Myths

Myth #1: Personal Debt Is Bad

Some people think that debt and taking out a loan or credit reflects poorly on your ability to manage your finances. But as long as you borrow responsibly, debt can be an efficient way to reach your goals.

For example, college loans improve your ability to get a good job. House loans can help you invest in a property that increases in value over time and has tax benefits. And line of credit loans — an alternative to credit cards — lets you borrow money only as needed.

Myth #2: Personal Debt Will Hurt Your Credit Score

Maxing out your credit limit can lower your score. However, avoiding debt altogether will also have a negative effect. Here are some reasons why:

  • You cannot establish a credit history if you never take out any loan or credit. You will have “a thin credit file,” meaning lenders will have no concrete basis for your ability to qualify for a loan and pay it off.
  • Second, if you already have a low score, the only way to improve your score is to take out a loan and show your creditworthiness by making payments on time.

Myth #3: You Can’t Take Out A Loan If You Already Have Debt

Taking out an emergency personal loan is still possible if you have an existing loan obligation. At Tennessee Title Loans, Inc., we have flexible lending criteria and offer several types of loans for people with debt, a low credit score, or no credit history. These loans include title, payday, and line of credit loans.

Myth #4: Checking Your Credit Report Will Lower Your Credit Score

Every year, you are entitled to one free credit report from each national credit bureau (Experian, Equifax, and TransUnion). Finance experts encourage you to use that opportunity to monitor your score, find ways to improve it, and check for any errors in the credit report.

Checking your credit report once a year will not negatively affect your score because these checks are considered ‘soft’ credit checks. On the other hand, several ‘hard’ credit checks may negatively impact your credit score. These occur when you apply for several loans from different lenders at one time, as these multiple hard credit checks can harm your score.

learning about personal debt myths

Myth #5: Personal Debt Is Shameful

Some people think that debt is embarrassing because others will feel that they don’t have much money or spend too much.

However, even the wealthiest people and the most prominent organizations use credit. They may have personal debt like credit cards and car loans or take out house loans to invest in a property. Companies also take out business loans to expand their business. Even governments have debt!

Many people were severely affected by the pandemic and the post-pandemic economy. Others had personal crises—even millionaires say that there were times when they were flat-out broke. Even if you have a low credit score because of previous financial difficulties, you shouldn’t take it as a sign that you’re a failure.

So, personal debt is simply part of life and nothing to be embarrassed about! You can always manage your debt and bounce back after tough times. 

Myth #6: There Are Only Two Kinds Of Personal Debt

When people think of personal debt, they imagine credit cards or loans where you borrow a fixed amount.

However, there is a third option: line of credit loans. They work very similarly to credit cards because you have a maximum credit limit and can borrow (instead of “charge”) just enough for what you need at any time.

You only have to pay interest for what you borrow, and when you complete the payments, the loan “resets,” and you can borrow again.

Lines of credit loans are convenient because you always have a safety net. If ever you have a financial emergency or need to cover an unexpected expense, you can access cash without starting a new loan application.

How Can I Get Line Of Credit Loans Near Me?

Tennessee Title Loans, Inc. has one of the most convenient processes for line of credit loans. You can have a maximum credit limit of up to $4,000 in much less time than it would take to apply for credit cards or traditional bank loans.  Here are some reasons why line of credit loans are quick and easy options for life’s unexpected difficulties:

  • Online inquiry. You can get a free loan consultation from the convenience of your home.
  • Simple requirements. You must present your latest pay slip or proof of income, a lien-free vehicle title, your ID, and a vehicle for inspection.
  • No credit score requirements. You can apply even if you have bad credit or do not have a lengthy credit history.
  • Fast approval process. The in-store visit can take as little as thirty minutes, and once you’re approved, you can get the money either that day or, if it’s after the cut-off time, the next business day.

happy about learning personal debt myths

Fill Out Our Online Form Now!

Just fill out the form to get a call back from one of our trusted loan representatives. They can explain more about the loan and book an appointment for you at any of our many Tennessee Title Loans, Inc. locations


Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.

Louis Tully

Louis Tully is a full-time finance writer offering financial expertise to everyday consumers. He understands the core values of finance and used his writing talents to share his own experiences with money to his readers. His articles teach how financial failures can easily become successes by making new habits and creating realistic goals.