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At times, life brings us to such situations where we are in urgent need of big sum of money and we don’t have any source of providing us instant cash. Banks could not be of any help in such a situation as they take a long time to process a loan application and then one important criterion on which they measure ones loan repayment capability is his or her Credit Score. Due to any reason, if this score is too low, then a person’s chances of getting loan are even bleak.
So, the question is what is the solution if we are in an urgent need of cash and our credit rating is also low? The official and expected answer to this question is – There is no solution except to have patience and follow a long procedure of getting your credit scores corrected. Go through the link below to learn how to increase your credit score rating-
However, unofficially, we know that there are many such local individual lenders who can help us with our immediate cash need but on agreement of very high interest rate and definitely, some collateral.
But what if the conditions are even worse, something that we are trying to get on – Instant loan with bad credit and no collateral? Is there any possibility? Are there any solutions?
A big yes! Read on to know more!
Though the regular banking system of India would not provide you any help however with the emergence of digitization several options are available online. Yes, you can apply to online lenders who’d be willing to help you. One search in Google should get you the desired answer BUT before you leave the page and start searching, here’s something important that you need to know about this procedure of online loan applications or simply instant loan solutions.
Since banks are generally strict in reviewing loan applications and usually have long and tedious procedures of sanctioning loans hence in the recent times lot of digital finance companies have emerged which can help you with your instant cash need!
In India, this concept of payday loan, also known as Salary or Cash Advance Loan is quite new. It is a short-term unsecured loan usually given in cash within 2-3 days’ time for meeting short-term requirements. The rate of interest is usually high in such types of loans. It could also touch a maximum of 1% per day. But BEWARE there are many sharks also online who are ready to provide you instant loans but actually trap you in ultra-high interest charges or hidden fees. So be careful and understand terms and conditions properly before you apply to any such online agency.
Though in some ways this process of online application for loan is advantageous too, as it saves us from hassles of long procedure of application. One can apply and submit the documents and proofs online and can even get the cash disbursed at his or her doorsteps or in his or her account. The process is also short-term and does not take more than 24-72 hours. For those who are in emergency and need cash on immediate basis find such a means as boon.
But on the flip side, this could be tricky too! The biggest disadvantage to applying for a 3 months or an instant loan is the hefty interest rate. Though the immediate emergency situation gets met but the high charges of interest later can take a toll on one’s monthly budget and savings.
In some of the cases, the interest is charged every day. For example, 1% every day or so! So, let’s say if you have taken an interest of Rs 10,000 to meet an emergency financial crisis and if you use this money for just 3 days and wish to close the loan soon after then on third day you’ll have to pay 10,300 Rs. Now, imagine, if this keeps growing day after day and imagine if the amount that you borrowed was Rs 100000. Your eyes might be dilated by now! And hence the advice – Be Careful!
Not only this, but there could be yet another disadvantage that the lender might give you money less than what you are expecting. He/she might doubt your payment capability or would be intentionally doing it to see how desperate your need is.
Infact, a better alternate to applying online for an instant loan is Gold Loan. Instead of paying a hefty interest, it is better to pledge gold that you have and get cash in place of it. There are many such renowned lenders for same. The good part is that in this case, you get a longer tenure as you have given gold as collateral and the interest is also comparatively low. You can continue to pay the interest till the time you are not able to arrange the principal.
Another interesting and benefitting thing in taking gold loan instead of online ones is that the lender won’t check your credit rating! Yes! You read it right! The reason is obvious – since you gave your gold as collateral so the credit rating is not required.
In no manner are we promoting one manner over another, but it’s just a perspective from the borrower’s point of view. A person who is already in crisis that too for a very small amount might see the debt doubled if he or she falls in the trap of instant money available readily.
On the other hand, the gold kept as collateral will keep on tempting him or her to pay the money back as soon as possible and get his valuables back. At least, in Indian scenario this is very much true as we know well that in India Gold is one of the most important valuables of our homes and also it is associated with family, feelings and religion.
Last but not the least, the best way to avail loans as per one’s need requires that a person may maintain healthy credit history and scores. This is the best solution of all and of all times!
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