Alternatives To Borrowing From The Bank

It is often hard to get bank loans, especially the cheap ones. This may be ironic but that’s true. However, if you are refused for a loan then you have got several other alternatives that you can explore. Some of these are discussed as under.

Credit unions

These unions are made and administered by some people who have certain things in common. They might live in same town or in same estate, or they may have same job, for instance. They fall somewhere between a cooperative and a bank. These credit unions provide easy-to-use, low interest borrowing and saving for the members. Union members invest their money saved by them getting a reliable and goo savings rate. Other members who’re in need of money lend it at affordable rate. Hence, it benefits everyone.

Peer-to-peer lending

Peer-to-peer lending is one of the close forms of crowd funding. Typically, these loans are funded by different organizations and people who are usually the owners of other businesses. This type of financing option is suitable for the established businesses which are in need of some quick cash, new businesses which are eyeing further growth and the ones which need some help with their cash flow. Major difference between these loans and crowd funding is the fact that you do not need to give your equity up. All you have to do is to pay interest on money that you have borrowed.

Pawnbrokers

Pawnbrokers usually have a bit bad reputation and they mostly provide loans at quite higher rates of interest and they may prove to be costly. They offer loans for the short term that are guaranteed by some personal possessions. They are also regarded amongst very few options to secure a loan with no credit check. Many items can be pawned including jewelry, watches, antiques, or even your cars. It is comparatively old-fashioned method to borrow money. You have to hand over some of your belongings like gold ring or a watch to pawnbrokers in return for half of agreed value for your goods. You can then purchase your item back from pawnbrokers for your loan amount in addition to the interest amount that the two parties had agreed upon. The pawnbroker determines value of goods and, therefore, proper care should be taken when choosing the item to be pawned.

So, you can choose any of these alternatives to borrowing from the bank depending on which of these suits you best.

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