How to Get a Loan
Decipher your money problem with top 7 loan-getting ways
Today while applying for a loan is a common practice, the lending guidelines have become tighter than ever before. Thus, not all applicants are lucky enough to get the loans and carry forward with their important financial tasks. There are many financial obligations for which people borrow money. Some of them are debt consolidation, home improvement plan, buying a home, financing a vehicle, starting a business or expanding the existing business. Now “how to get a loan?” is a very common question which haunts most of the people who have list of things to do with the borrowed money.
Are you applying for the loan for the first time? Don’t you know which one will be the perfect approach? Or are you one of the applicants whose loan application was rejected and now you are looking for other ways to borrow money? Well, then this “how to get a loan?” question is answered below in an effectual way.
How to get a loan? - Perfect solution to your problem
Getting loan might seem a tough job, but below few ways are listed from which you can reap all the benefits. These ways will help you navigate the lending sea easily.
Bank loans: Different banks have different lending policies. If one manages to get a loan from local banks, it will be really helpful as the banks offer low interest loans and at the same time provide the borrowers long repayment options. However, the problem which arises here is that the stricter guidelines are not met by most borrowers and thus their loan applications get disapproved.
One more risk with these types of loans is that if you miss on paying back the money, the collateral which the loan is secured by will be seized by the banks. So, all you need to do is to look around and search for a bank that offers favorable loan terms that you can manage well. Therefore, when it comes to borrowing a low interest loan, you should start with the bank which you already have an account with. If you have cordial relationship with the banker, he/she may extend a helping hand which will make the task of getting a loan easier.
Government loans: Government loans are the best answer for your question “how to get a loan?” but mind it getting them is the toughest job. Like traditional bank loans these loans are also not easily cracked. Even if you are a capable applicant the whole process may take a long time.
If you think that you are capable applicant and are not in an urgent need of money and can wait for some time then government loans are the best way. The interest rate is very low and at the same time you have a long time for repaying it.
Credit cards: Credit cards are a perfect solution to urgent money requirement. But after the new CARD Act rules only personal credit card can be used and business credit cards are not subjected to this new act. You can get an immediate answer to your “how to get a loan?” question if you use this way of borrowing money.
But do remember one thing, use credit cards very carefully otherwise you will have to regret for whole of your life. As per a financial expert, one should go for this option only if he/she is has a short-term need and is 99.9 percent sure that very soon there will be money to pay off the credit card.
Home equity loan: You will get immediate cash if you go for this way of getting money. This is really an effective way but at the same time caution should be maintained as many people were entangled in hassles due to this type of loan.
Actually home equity is a good option of serving as collateral for this loan or also for home equity line of credit (HELOC). Many banks have cut the HELOC and the loan-to-value ratios have been made tighter. No doubt this is a risky option because if you fall or make a small mistake, you will lose your sweet home.
The repayment plans here are different, in some at the end of the year you have to make full payment of any outstanding balance and in other you are asked to repay over a fixed time period which may be 10 years.
Loans from friends and relatives: If you manage to get loan from your friends or relatives, nothing can be better than this. Your near and dear ones will be the happiest one if your business flourishes.
Make sure you return the loan in time at an interest rate which will make both the party happy. And to avoid the IRS don’t go for interest-free loan rather make specific repayment terms which will reduce the tax consequences.
Non-conventional loans: After facing disappointment from many traditional sources of loan, people get their question “how to get a loan?” answered easily through the non-traditional sources. These loans are apt for those who have been rejected because of poor credit score, lack of income and bankruptcy etc.
Here the lenders are at risk and thus they offer loans at higher rate of interest. So, the borrower has to repay more in comparison to that of traditional loans.
These days there are also websites offering loans to the people in need. One such example is Prosper.com. Here the interest rate is fixed and borrowers and lenders are brought at a mutual understanding and they all agree at three year unsecured loan.
Loans on retirement accounts: Though it is very easy to get loan on retirement plans but at the same time they are very risky. If you are successful in your attempt of investing the money then well and good but if you fail, your future will be immersed in complete darkness.
Also be careful of one thing, if you lose or leave the job, in most of the cases you are asked to repay immediately.
So, hope the question “how to get a loan?” is satiated with the above mentioned top ways of getting a loan. You can opt any of the ways which meet your entire requirements.