There are loans that ask you for collateral, and then there are others which may not expect collateral but have a high interest rate.
It is always a good idea to set aside some of your monthly earnings to steer you through a rough patch or to help you with some required funds in case of an emergency. However, there might be times when you do not have the requisite money.
Of course, in today’s scenario, where banks have no qualms about offering a loan, it does seem easier to get your hands on some quick money. But, is this really as easy as it sounds? Not really. There are loans that ask you for collateral, and then there are others which may not expect collateral but have a high-interest rate. In such cases, what you need is a loan that would be just right for you. Believe it or not, but there are various kinds of loans these days some of which you might not even be aware of.
Got you interested, have we? So, let us jump right in and check out what these loans are, which have not yet become as popular as the other conventional loans.
1. Loan against your car
Yes, you can indeed secure a loan against your favorite wheels. The best thing about this loan is that it is less expensive when compared to personal loans or loan against credit cards and can be secured even if you have a low credit score. What’s more, just like a personal loan, this can be used to fulfill any purpose. The banks usually offer about 85% to 90% of the car value as the loan amount. The repayment period for these loans is 1 to 3 years.
2. Business loan against card swipes
Whoever thought that you could actually secure a bank loan against the number of credit card swipes that you make? But, this is a fact and something that you can literally cash on. These are loans that are usually offered to the retailers who may be looking for some liquid cash to invest in their business. The loan is offered against the number of card sales that the retailer makes. You can actually secure a loan amount of up to Rs. 2 crore if you are an established retailer and up to Rs. 50 lakh if you are a novice. However, the assessment is made based on the average card swipes. The repayment term for such loans may vary from 6 months to 2 years.
3. Loan against credit card
This is quite similar to a personal loan, the only difference being that while you need to wait for the approval of personal loans, the loan against credit card is pre-approved, which means quick cash for you. What’s more, unlike the personal loan, you don’t have to worry about tiring paperwork and presentation of documents when opting for this loan. The rate of interest on these loans which varies from 15% to 21%, is lower than the one what is claimed by the banks on the cash withdrawals made using credit cards.
4. Loans for startups
The name says it all. If you are thinking of starting a business and looking for finances, there is no better way to get the required funds. These loans are specially designed for financing new businesses that have little or no experience in the entrepreneurial arena. The loan is offered to people between the ages of 21 to 65 years with a good credit score. Of course, you need to get through some documentation to get the loan sanctioned, you can expect flexibility in the loan amount as well as its tenure and repayment period.
5. Mudra scheme
Mudra is short for Micro-Units Development and Refinance Agency. The Mudra scheme is a scheme that has been launched by the Indian government this has been specially created to offer financial support to micro and small enterprises whose credit requirement is less that Rs. 10 lakh. Popularly known as the Pradhan Mantri Mudra Yojana, it is categorized as Shishu Loans, Kishore Loans and Tarun loans with the amount varying from Rs. 50000 to Rs. 1000000. These loans can be availed by all non-corporate small business segments that are working as micro and small units. The loan can be availed for buying a vehicle, as a business loan or as an installment against a business loan.
Securing a loan in itself is quite a tough task what with loads of documentation and formalities. However, all this really proves beneficial only if you sign up for one that would be perfect for your requirement and feasible for you. Now, that you know of some more loans that are offered by the banks, you can make a much more informed and wiser decision, when it comes to fulfilling your need for quick or emergency funds.The writer is Co-Founder Director & CEO at Antworks Money