7 Bank Alternatives for Bank Loans to Answer Financial Troubles
Getting approval at a bank can sometimes get intimidating with the strict eligibility, formalities, and lengthy approval process. These leads people to find alternatives whenever an emergency requires instant fund. There are some options still available that serve as the perfect alternatives to the banks to their relief.
These alternatives are created for different situations a person may encounter. These include a small-term loan until the next paycheque to money for real estate investment. Therefore, start the research on these alternatives instead of dwelling on the rejection letter from the banks.
Credit Card-Alternative Of Bank
Credit card is a line of credit offered by banks and other financial institutions to their customers. These cards are beneficial during the tough times to get instant access to funds. You can manage the small expenses and even take cash from the nearby dispenser to address the situation.
There are some drawbacks when it comes to credit card debts. The interest rates are sometimes unreasonable that creates unnecessary stress on the finances. Also, the limited credit makes it a solution for smaller expenses such as gadget or grocery shopping.
You can avail of a credit card in no time if you have a good credit history. The interest loans and APR will vary based on your profile. Furthermore, there are special discounts and introductory offers for the users when they use cards for purchase.
Many financial institutions serve a specific community in their area of operation. Their interest rates are lower than the traditional loans from banks and other lenders. The application and approval process has fewer complications and more flexibility.
However, they only serve the members of the community, which can be quite exclusive. You have to explain the purpose of the loan to the other members responsible for making decisions. Moreover, you should continue the search for alternatives if you want online services from the lender.
The physical branches of a credit union are minimal, consider yourself lucky if your area has one. Besides, their customer service far exceeds the banks because they work to help one another. The members make the decision which eliminates any dispute with the management.
Private Lenders As Bank Alternative
Private lenders are the individuals or institutions that offer financial services such as a loan to the borrowers. You are dealing directly with the lenders, which makes the whole process transparent. Since there are no brokers, you don’t have to pay the brokerage fees.
You can avail of a loan at the comfort of home online from a personal lender. The services include short- and long-term loans for various purposes. The approval takes only a few minutes while the amount is transferred within 24 hours.
You don’t have to visit the office of these lenders to apply for a loan. However, they charge interest rates and specific fees more than the banks. The increased overall cost is justified with flexibility, leniency, and comfort.
Family or Friends
You can ask the family or friends to provide financial help with a small loan. You may not have to pay interest and late fees for missed payments. There are no eligibility criteria, and you can start the repayment when the finances are stable.
Many people feel uncomfortable while discussing their financial troubles with other people. Involving money in the relationship often brings dispute and differences. There are hard feelings that are not discussed if you miss payments or they refuse to help.
If your friends or family offer you financial help, it is essential to take care of the formalities. You should sign an agreement to avoid any confusion or miscommunication. Make sure you don’t miss any payment as they will feel uncomfortable while asking for it.
You can raise some money for temporary relief to the financial trouble by selling the clutter. These are the unused items lying around in your house that serves no purpose. Some of them carry a high price tag in the collector’s market.
You should not feel embarrassed to put the stuff on sale during the tough times. Many pawnshops will offer you instant money for the stuff. Or you can use the internet to get the best price based on the interest of the audience.
It is never easy to let go of the stuff with some attached sentimental values. You can ask the pawnshop owner to keep the item for some time to repurchase it. If possible, sell it to your friends to make sure it remains within your reach.
Government offers relief package for the business and individuals that require money. You can use the government startup scheme to fund your new business. If you are among the ones who are unemployed during the pandemic, there is some relief package for you as well.
It may take some time to get the funds from the government as the process are often tedious. There is a minimal fund allocated for an individual. Also, you cannot use it for personal expenses such as a wedding or car finance.
There are numerous apps available for smartphone users that provide short-term loans. These apps are useful to access instant fund based on your credit profile. However, interest rates are steep when compared to traditional loans.
You need to provide the personal details on a platform with no measure of security. Also, they may access some other information nowhere related to your loan application.
In the end, it depends on your purpose and credit profile to determine which option is the best for you. You may have to dig a little deeper to find all the relevant details about the offered services. But one thing is for sure, a rejection from a bank is not the end of the road for you.