7 Bank Loan Alternatives When You Need to Borrow Money

The subject of borrowing a loan can draw in a ton of varied opinions. Some will say you don’t require one, while others may vouch for their importance. It all just boils down to your personal circumstances; certain situations will necessitate the use of a loan. However, you do have other options available.

Taking out money from a particular source comes with the idea that you’ll have to pay it back eventually. In most cases pertaining to the loan, it means that you’ll usually have to repay more than what was taken.

If you want to borrow money, check out these seven user-friendly bank loan alternatives:

Alternative #1: Credit Card

One of the most universal means of accessing money is through a credit card. You’d be hard-pressed to find anyone who doesn’t have one on-hand in this day and age. Banks will swear by their importance, and, for the most part, they are right.

Instead of taking out a huge sum of money through a bank loan, your credit card provides immediate funds. Each card will have a specific credit limit, which varies from person to person. As long as you make your monthly payments on time, your credit rating will remain in good standing.

Alternative #2: Line Of Credit

Line of credit is a great bank loan alternative. Although the appeal of a credit card can be convincing, it isn’t your only accessible alternative. Gaining access to money in a quick manner can also come in the form of a personal line of credit. In essence, this works by providing you with a pool of money that is available whenever you need it.

This option might allow you to combine all of your debt balances into one, singular line of credit. Reducing the amount of debt you have becomes more challenging, when more loans are taken out. A personal line of credit could not only help with this, but save you money in the long run!

Alternative #3: Payday Loans

For those who require an even faster method of getting access to money, you will want to get payday loans. Although not technically a loan provided by a bank, payday loans can be a lifesaver. They work by providing you with an agreed upon set of cash, that will be paid back by your next payday.

Emergencies are bound to crop up in our lives at some point in time. You might have a broken pipe in your home that requires immediate fixing, for example. Or, an unanticipated prescription bill isn’t covered by insurance. Payday loans help to alleviate the stress from these crises, should you pursue them.

Alternative #4: Merchant Cash Advance

For those who run small businesses, you might have had some difficulties in securing a loan. Local businesses are considered by lenders to be more riskier than larger organizations. If you can efficiently persuade them, you could walk away with a merchant cash advance alternative.

A merchant cash advance works by first receiving the lump sum of funds that is sought out. In exchange, a lender will receive a portion of future credit card sales. This can work in your favour, especially if your business has a steady rate of payments by credit card. It is a beneficial means to assist your company, without the need for an actual bank loan.

Alternative #5: HELOC

The process of owning a home is as intricate as one would think it is. There are a multitude of phases to successfully pass, most of which will hinge on sums of money. If you want to minimize the amount of involvement a bank has in the procedure, consider taking out a HELOC.

Colloquially known as a home equity line of credit, HELOC’s work by letting you borrow from your home’s equity. The loan received can be used for virtually anything at this point. However, many choose to use the funds as an investment into the home itself. The more you invest into your home’s value, the better off it becomes relative to a market!

Alternative #6: Credit Union

For a more community-based alternative, you may want to try your hand at a credit union. These organizations offer assistance to members for various monetary areas, such as finance management. With a steady income, you can expect to receive the funds you need for the present moment.

Alternative #7: Support Network

When in doubt, asking a close family member or friend is always a viable option. We all know that, sometimes, our loved ones can fall on hard times. Being able to lend financial support is a direct line of assistance, without the interference of a bank.

Before you choose to go the route of a bank loan, you should always consider what other options are available. You want to be able to get rid of debt without hassle after all. Consider all of your alternatives carefully, before deciding to go with one or another.