Bank Loans are a priority which most people rely on when they come across tough financial situations. But getting a loan is not a piece of cake, Bank’s check their relationship with the borrower, verify documents, check credit score, and much more. And even after all these proceedings gets complete, there are chances that the loan will not get approved. It may be because of repayment issues, low amount of loan, and most importantly, no credit or bad credit rating.
Moreover, it is essential to know the actual needs before applying for the loan. There are many other means available by individual’s can get money and even at no or low-interest rate. To start with, first, consult a financial counsellor who will advise you the best option to borrow money. Many financial institutes offer free, private and confidential financial counselling to students, young entrepreneurs. Bank loan substitutes advised by counsellor may have:
- No Interest Loan Scheme (NILS)
- Step up Loans
- Easy Payday Loans
- Short-term low-interest personal loans
NILS, Payday loans are the financial lifelines one can consider in tough times. They come with fast approval and no extra charges
Substitutes for Bank Loan
What is No Interest Loan Scheme
When you are in urgent need of money and want to borrow only a small amount with no extra cost NILS is the best option. Many microfinance companies lend the amount to low-income households in the form of NILS. In NILS, you only need to repay the amount you borrowed with no-fees, extra charges and interest rate.
Thus you only pay for what you get. Students can borrow money to purchase laptops, books, study materials while home-owners can opt NILS for buying furniture, electrical appliances and other household items. NILS guarantees safe and affordable credit without any stress of interest repayment.
Step-Up Loans
Step-Up Loans is useful for middle-class households who find it hard to get a loan from banks. Banks usually offer a large amount of credit with a high-interest rate over a long duration of time. Having a loan on a high rate of interest means you have to pay a hefty amount of money in return.
For families who require a low amount, Step-Up loans are perfect as they are offered on low-interest rate with a fixed period of time. There is no processing fee involved, and you only pay a small amount of money in addition to borrowed one. Step-Up loans are beneficial in case of medical emergencies, regular doctor check-ups, or to buy a second-hand car or auto repair services.
Easy Payday Loans
For real estates, small businesses, young start-ups payday loans are good. They are unsecured loans with fast approval time. So, if you want to invest in a property or book a good deal but out of funds, payday loans are the perfect option. They are also termed as cash advance by corporates or line of credit.
The lender will give a credit limit up to which you can withdraw and then repay easily in monthly instalments.
Short-Term Loans
Financial counsellor advice for short-term loans to avoid debt. Usually, loans at a high rate of interest have huge monthly instalments. You will end up paying more to the bank than you will earn. Short-term loans have a low-interest rate and complete in 2 or 3 years. Moreover, most of the banks and financial institutes offer discounts on these loans as they invite more customers.
While lending money can help you overcome the cash crunch, it is always better to avoid it. Most of the time, businesses or individuals apply for a loan for medical assistance, accidental repairs. Here insurance proves to be the most beneficial factor. Having insurance helps in time of emergency and removes the worry to borrow money.
So, secure your assets with insurance, and if need urgent money, then consider the substitutes mentioned above instead of bank loans. This will help you to meet your requirements without any burden of paying those hefty amounts.