Regulation of personal loans has changed. Gone are the days when you would have to comply with your bank to get the loan approved or have a standard interest rate charged by different companies. Technology has made it possible for firms to set up shops online and this is characterized by lower overheads. As a result, there are more affordable options and different alternatives to the traditional personal loan packages.
Some of the convenient, fast, and affordable options in the market today include:
Peer to peer lending
If you need a break from traditional banks and their cumbersome procedures, then you may consider getting financing from peer to peer lenders. Peer to peer or P2P lenders make the process possible because they have structures that allow individuals to crowd fund loans for profit.
Most of these lenders are found online and generally charge lower interest rates. There are many such firms and you can check online reviews to pick a company that fits your bill.
Zero percent interest credit cards
Online unsecured personal loans are available from various companies wishing to help you repay your credit card debts. Credit card companies are in competition and to keep you with them, they offer zero interest rates on credit card balances.
This option is suitable when you are looking for a loan that you will repay within a short or a limited duration. You will get the loan approved faster when you have a good credit standing. The repayment period for this loan lasts between 12 and 21 months, hence a great way to get a loan affordably.
You don’t have to depend on banks for an unsecured loan. The best shop for loans at low rates is on the web. There are many licensed companies online ready to save you dollars. These companies offer loans with varied interest rates and you cannot run with the first offer on the table. Shop around. Besides comparing interest rates, check out their fees and transaction costs. The company shouldn’t have prepayment penalty fees and the terms should be favorable to you.
If the loan is for repaying your debts, as is the case in debt consolidation, the rates should be lower and the overall total costs low and reasonable enough resulting in savings. You may choose fixed or variable interest rates depending on your source of income and the reason for taking the loan.
Home Equity Line of Credit (HELOC)
Another way of getting a personal loan is by using your home’s line of equity. Your home serves as collateral for the loan and you get a loan with low interest rates in return. Interest payable on a home equity line of credit is deductible from your taxes. You can also get flexible repayments where you decide how to repay your monthly payment.
401k or Life Insurance
You may also use your 401k or your life insurance as a personal loan. Since this is your money, it is considered a safe option but should be pursued only when in dire need of the loan.
In conclusion, rather than spending a lot of time in the bank and servicing an expensive loan, you should pursue these options. You should also reorganize your finances and spending to prevent the need for constant borrowing.
Greg Sanders is a financial consultant with decades of experience in the financial and banking sectors. Learn more about trends in online unsecured personal loans from his blog.