For urgent unexpected expenses, we usually turn to the easiest solution available around us, Personal Loans. Since Personal loans are easily available, require minimal documentation and .the amount gets disbursed quickly. With so many NBFCs and Banks around us, almost everyone has an access to Personal Loans. However, the loans are unsecured, Lenders need to ensure that the money they lend comes back to them during the tenure of the loan. Due to the risk involved, Lenders reject loan applications if they feel that the customers will not be able to or willing to pay.
So, what should you do if your loan application was rejected? Luckily, there are alternatives to Personal Loans you may consider getting the money you need. We have listed a few of these alternatives in this article.
- Gold Loan – Gold is an asset that grows in value over time. This is why, it is the most valued metal in an Indian household. And this precious metal can also help you get a loan. Gold is considered a collateral and money can be borrowed against it. The amount you can borrow depends on the value of the gold and loan amount is usually 75% of the value of Gold. There is minimal paperwork involved and a credit check is also not required to obtain a Gold loan
- Loan Against Property: If you own a property (residential, commercial or industrial), a loan can be obtained against it. The property is kept as a collateral and approximately 80% of the property value can be given as a loan. As the loan is obtained against property, the interest rates are generally on the lower side. This type of loan should only be taken if the amount required is high. It usually takes 2-3 weeks to obtain this type of loan
- Loan Against Fixed Deposits: If you believe in saving money in a bank as fixed deposits, you can take a advantage of this and obtain a loan from the same bank. For the application process, you’d be required to visit your bank. Since you are an existing bank customer, they do not require a lot of documentation
- Loan Against Insurance: Some insurance providers allow their customers to take a loan against their life insurance policy. Compared to Personal loans, the interest rates for such loans are generally lower
There are more alternatives available in the market. Each alternative has its own advantages and disadvantages. Before applying for any type of loan/credit, please get complete information about the loan and the lender and also read the terms and conditions of the loan. Safe borrowing practices lead to a healthier financial health and an improved credit rating. And with improved credit rating and history, the chances of loan approval, personal or any other, rise up.
Borrow Safe. Borrow Smart.