Taking a loan can be an incredibly stressful process as one would have to submit a lot of documents, go through series of verifications and registrations. However, there are very simple ways you can borrow money. Most persons borrow for the intent of getting a new car, house, office, or to fund a project. Some parents can also take loans to sponsor their children or loved ones through school.
At a point, almost everyone takes a loan to solve an immediate need, but how fast can you get one? You probably need to get a loan before the week’s end for a project that has a time limit attached to it. Perhaps, it’s for a college application. You should consider reading to the end as we will share three top ways to borrow money without stress as well as their advantages and disadvantages.
Financing Brokers
Financing companies or Finance Brokers are privately owned financial bodies who are concerned with giving out loans to the public for a particular period, usually on short-term basis. Unlike banks, these institutions do not provide services like money deposits or fund keeping for individuals. Their major duty is to disburse funds to businesses as well as individuals who need them. This means of borrowing seems to be the fastest as funds could be delivered within a space of 24hours as long as you are properly registered and verified with them.
Some finance brokers only offer short-term loans while others offer long-term loans which could last up to a period of 1 to 2 years. These finance brokers are, in most cases, associated with major companies in sectors like healthcare, education, and transportation. You can go to Lamina Brokers to find out more.
Advantages
Some of the advantages of using this means of lending include:
- Low rates compared to institutions like banks.
- Quicker approval process.
- Convenient loan delivery.
Disadvantages
Some disadvantages of this means of lending include:
- Limited services: they only offer loans.
- Limited loan packages.
- Fewer restrictions and checks from federal financial bodies.
- They are subject to fraud.
Banks
The banks have, over time, been the most common means of lending. They are referred to as traditional sources of borrowing. Banks can provide lending services by distributing money that was deposited by customers using methods like financing products. These financing products could be mortgages or customer loans.
Banks primarily make their money through this means. They charge high fees on funds borrowed and pay a little into deposit accounts where funds were taken. This way, they keep the bulk of the profit made from this spread. You can read this article to learn more about bank spread.
Advantages
Some of the advantages of using this means of lending include:
- It feels more convenient and easier to take loans from your bank since you are already familiar with your account officer.
- Swift customer support team available online and offline.
- Copies of signed documents are properly documented and sent to your email.
Disadvantages
Some disadvantages of this means of lending include:
- Huge fees and rates
- Your loans can be resold to other finance companies or even to another bank. This may result in a change in the terms of your loan agreement with the previous bank with little or no notice.
Crowdfunding (P2P)
This refers to a method where people borrow money from themselves directly. This means of lending does not usually require a financial institutional intermediary. Crowdfunding first came into light in 1997 when a British band funded their concert through funds from their fans. This funding process is also referred to as P2P; peer-to-peer.
There are various platforms for P2P funding. While most are concerned with charity donations, others focus on investors giving out loans to small business startups for a certain percentage return. You can visit https://en.wikipedia.org/wiki/Crowdfunding to read more about crowdfunding.
Advantages
Some of the advantages of using this means of lending include:
- It’s possible to have multiple lending sources.
- Rates are flexible and can be negotiated.
- Faster loan delivery.
- Fewer verification processes.
Disadvantages
Some disadvantages of this means of lending include:
- Higher possibility for hidden charges.
- One might get disappointed by funding partners.
- Little or no regulations.
Conclusion
Borrowing money is a stage almost everyone gets to. Since emergencies are inevitable, people would require taking loans for various reasons. These reasons can include education, health care, getting a new house, for an office project, or getting a new car. However, in most cases, it takes a lot of time for these loans to get processed and approved. But when you use the borrowing means we shared in this article, you can access these loans faster.