Money is one of the most important assets in today’s time. It is the medium of trading for goods, services, medications, leisure and property. It is an understatement to say that we must gain control over our money, or its lack will forever control us, as quoted by Dave Ramsey.
And yet, there can be situations, when we do not possess sufficient money, due to several reasons. Thus, leading to a necessity to borrow money. However, this is a tedious process in itself. To acquire a secured loan, one must pledge collateral, a condition which many who are in need of money cannot satisfy. Thus arises a circumstance where borrowing money needs to take place without a collateral. The most common solution is a personal loan. But in recent times, other methods to get an unsecured loan have emerged. How? Well, the following are a few tips on how you can borrow for almost anything without pledging a collateral.
Table of Contents
Also known as Personal Loan, the lender issues money to the borrower based on the credentials of the borrower. The bank entrusts money, depending on the financial, economic and circumstantial holding of the borrower. Since it is a non-secured loan, where the only proof of the loan is a signed transaction, the sum of money that can be borrowed is often lower than what is available under secured loans. However, these kinds of loans are ideal, where the borrower does not possess solid collaterals for pledging. If you are a salaried individual, you can apply for personal loan easily.
A set-up where individuals can borrow money from other individuals through the aid of an online platform, Peer-to-Peer loan is an informal, yet safe method of borrowing money. Online sites connect the investors with a lot of liquid cash to circulate, to borrowers in need of cash. The investors earn interest, and the borrowers have a hassle-free way of getting money when needed. This cyber-money world is in function since 2005, and has been a thriving interaction. The process is similar to applying for a personal loan.
A concept of borrowing money in advance, to return the amount when your salary is issued, is also called early salary loan. This practice is often dealt in between the company and employees, as it is easy to keep track of the proceedings and offers much more dependability from both parties. Ideal for immediate small amount requirements, this method requires almost no documents or paper-work. It is like acquiring a personal loan from your company, however the rate of return is flexible and convenient.
In a situation where you require a large amount of money instantly, certain banks and organizations provide money depending on the severity of the situation. It is often a one time borrow and lump return policy. Though it requires no collateral, the interest rates are higher, as it facilitates the acquirement of money almost immediately, for emergency purposes.
The final resort of borrowing money without pledging collateral is to seek investors in friends or family. Borrowing money from known people or acquaintances depends on your credibility and in most cases does not accompany any return interest. However, it is a very personal dealing and the conditions may vary from case to case. Such loans do not demand collaterals, as it is out of goodwill and trust.
Loans can be a lifesaver in case of financial emergencies. And the options mentioned above can be helpful even if you do not have anything to place as collateral.