You can get funding from multiple sources if you are on the lookout for personal loans. For some of these sources, it is simply a matter of filling out a few forms. Others require collateral or guarantee of your ability to repay. Often finances from banks and credit unions is the conventional way of procuring funds. However, there are other places to obtain money that can put you on a path to financial success while meeting your funding needs. Let us find out what they are.
Friends and Family
Raising money through friends and family is the least expensive way to obtain finances, mostly because they may not charge you interest at all. You may not have to explain to them in detail why you need money in the first place. And almost all the time, they will be the first one to fall for your pleas. Besides, they won’t demand collateral other banks and financial institutions need. At one time or another, these people may have been in the same situation as you, so the likeliness of you getting the fund is high.
Another way to raise money for personal purchases is to bring in a partner who will share the item you are buying. For example, if you are planning to buy a boat for recreational use, borrow from someone to whom you are willing to lend the boat from time to time. Remember, in a situation like this, you may have to give up something in exchange for money, usually, access to things you need the fund for or a share of profit from the invested fund. Other times, you will be asked to treat the funding like any other loan from the bank that comes with interest and fees. This is for the lender’s protection as well as yours.
Home and Asset Equity
If you are a homeowner or have an asset that has a significant value in the market, this can be your source of personal loans. Of course, the amount you obtain will depend on the fair market value of the asset as well as an outstanding mortgage. Here, you are using your home or asset as collateral and financing your personal purchases. Not a bad idea, when you have accumulated years and years of equity in the home. The downside, however, is that you are putting your expensive item at risk if you can’t afford to repay the finances on time.
Credit card loans carry high interest and therefore should be used as a last resort when you are considering personal loans. However, unlike other fund sources, credit cards companies don’t ask for collateral. Nevertheless, you need to take a hard look at why the lender is willing to let you borrow money in the first place. Is it the interest rate? How much are late fees? What are the other terms that are on fine prints and in plain sight? These are some of the things to consider.