The Benefits of Being Flexible When Applying for a Loan
There are many different reasons for applying for a loan but it is something you always need to go about in exactly the same way, isn’t it?
Actually, no it isn’t. There are a number of ways of getting the money that you need to borrow. Before you go ahead and ask for a loan it is worth knowing the ways in which you could be flexible in order to get the right one for you. Here are some ideas to let you make sure that you choose the right sort of loan on your terms.
Use a Guarantor
One of the biggest benefits to using the guarantor loans method is that it can help youngsters get hold of money that would otherwise be out of their reach, although it can be useful in a lot of other cases too. A good example of when this type of loan could come in handy is when a student or someone who has just started their first job might ask for more money than a borrower would normally be able to give them. However, by offering the lender the comfort of a guarantor there is a far greater chance of getting the loan required. The process in this case is that the guarantor promises that they will pay off the loan if the person they are guaranteeing stops paying it for any reason. This makes it a fantastic way for parents to give a helping to their children until they are completely independent financially, provided that the guarantors are aware of the terms and how they could be asked to repay the loan if the borrower defaults.
If you want to take out a big loan then offering security can be a good idea. You might find it easier to access a big amount and the interest rates might also be lower if you take a secured loan rather than an unsecured one. Of course, the big danger here is that you run the risk of losing whatever is secured against the loan if you can’t make the repayments. Since this is usually the borrower’s house it is something to think about before going ahead. Secured loans basically let you free up some of the equity on your house in the form of a loan. This can be a useful approach for some people and is especially worth considering for anyone who might struggle to get an unsecured loan because of their income or credit history. If you have the option of both of these types of loan then you could ask for a quote on both and compare them to see which is best for you.
Use Your Credit Card Instead?
Most people would be extremely wary of using their credit card to borrow a large amount instead of taking out a loan. For a start, the higher interest rates on card borrowing can make it extremely expensive. Also, if you pay off just the minimum repayment amount each month then you could end up just paying off interest all the time without ever repaying any of the capital amount you owe. Having said all that, if you need access to cash quickly and easily then it could be an option to consider. To make it work you would probably want to switch the balance to a 0% interest card or a loan before you start racking up a lot of interest. The risk with doing this if you don’t have a replacement loan already lined up is that you could end up with problems if you can’t get the loan arranged for some reason.
Consider Different Channels
Do you always automatically think of going to your local bank branch when you need a loan? This was traditionally the only sensible way of getting a loan but that is no longer the case. These days you can go online, make a phone call or even use your mobile device to ask for a loan. All of this adds a great deal of flexibility to the process and means that when you want to borrow money it is now possible to do it on your terms rather than someone else’s.