Best Loans:- When you need money quickly and don’t have access to a traditional lender like a bank, an alternative finance provider might be the answer.
Alternative lending can provide fast cash for things like a car purchase or home renovation, or even help with unexpected costs like medical bills or auto repairs.
These loans are called “alternative” because they aren’t the type of financing that most people think about when they want to borrow money.
They are also known as “non-standard” or “alternative” loans because of their different structure and availability compared with standard bank loans or credit card financing.
Alternative lenders might be banks, credit unions, online lenders, leasing companies, even peer-to-peer websites that connect borrowers with individual investors who fund small personal loans.
Best Loans
1) Short-term loans
A short-term loan is one that has a term of one year or less. This type of loan is usually unsecured and has a high interest rate. Short-term loans are usually for smaller amounts.
Examples of short-term loans include: Payday loans, Installment loans, Signature loans, Rent-to-own, Online cash advance, Home equity line of credit, Credit card cash advance.
2) Long-term loans
Long-term loans have a term of more than one year. Long-term loans are usually unsecured, but secured long-term loans are available.
Long-term loans have a lower interest rate than short-term loans. Long-term loans are usually for larger amounts.
Examples of long-term loans include: Mortgage, Home equity loan, Auto loan, Business loan, Student loan, Medical debt consolidation.
3) Debt Consolidation
Debt consolidation is the process of taking multiple debt obligations and combining them into one new, single payment each month.
Debt consolidation can occur by taking out a new loan (like a personal loan or a home equity loan), refinancing an existing loan, or getting a second mortgage.
Debt consolidation can be used to pay off multiple high-interest debts with low-interest financing. Debt Consolidation Example: Let’s say you have a credit card with $10,000 in debt at 17% interest.
You also have another credit card with $7,000 in debt at 17% interest. With debt consolidation, you can take out a new $20,000 loan at a lower interest rate (like 5% interest).
You can then use the $20,000 to pay off your other two debts, plus any fees or interest that come with the new loan. You’ll then be making one lower monthly payment instead of three higher payments.
4) Auto Financing
Auto financing enables you to purchase a new or used car, or get a car loan from a dealership. It’s popular for buyers to use financing when they don’t have enough cash saved up for the down payment or closing costs on a car purchase.
Auto financing can also be used for used car buyers who don’t qualify for a traditional car loan.
Let’s say you want to buy a new car for $20,000. You have the cash saved to make the $5,000 down payment and you also have the $15,000 you’ll need for the loan. Since you’re a new car buyer, a traditional car loan lender may not approve you for a loan.
Instead, you may need to get a guaranteed auto finance loan. A guaranteed auto finance lender will give you a car loan even if you don’t qualify for a traditional loan.
You’ll likely have to pay a higher interest rate and have a longer loan term with auto financing.
Also Refer :- Best Loans
Conclusion
When you need money and don’t have access to a traditional lender, an alternative finance provider may be the answer.
Alternative lenders like online lenders and peer-to-peer lenders may be able to offer you a loan with a shorter approval process and lower interest rates than what you might be able to get from a bank.
Be sure to shop around for the best loan terms for your situation, and always read the fine print.
