With the constantly changing environment and the lack of traditional borrowing sources on the market, more and more people are struggling to get loans. This can be especially difficult for people looking for emergency money with a less-than-perfect credit score.
Fortunately, there are a number of alternative borrowing options available for situations like these. Allowing people to borrow money to tend to urgent needs, these solutions can be a more accessible, reliable and convenient way to borrow.
In this article, we will shed light on some of these unconventional ways to borrow money and help you get the loans you need.
Furthermore, we will also offer essential information needed to make an informed decision regarding these loans.
Let’s get started!
Payday Loans: A Last Resort
Payday loans are most commonly known as a last resort when it comes to borrowing money. However, that doesn’t always have to be the case.
With a wide range of lenders offering loans for employees, anyone can simply take out a payday loan for their urgent needs and repay it as soon as their paycheck comes in.
Specially designed for the short term, these loans offer an incredible way to access quick cash. That’s why it is essential to remember that payday loans are only a temporary solution.
Coming with a high-interest rate, these loans typically have the potential to trap you in a cycle of debt if not repaid within the due date.
Bridging Finance: A Short-Term Solution
Bridging finance is another incredible short-term financial solution used by individuals and businesses alike. Allowing people to bridge the gap between buying a new property and selling an existing one, this unconventional method involves taking short terms loans against their current property.
When it comes to traditional mortgages, they are often too rigid, have a long approval process and are usually given out for the long term. On the other hand, bridging finance loans are more flexible and provide you with access to quick money needed to secure a new property.
Although they come with a slightly higher interest, they serve as an excellent tool to purchase a new property whilst you’re still finalising the sale of your existing one.
Cryptocurrency-backed Loans
As cryptocurrency becomes more and more popular, the emergence of cryptocurrency-backed loans has taken the world by storm. Allowing you to leverage your digital assets like Bitcoin and Ethereum, these loans offer a brilliant way to get cash without having to sell your assets.
In this innovative borrowing solution, you can effortlessly use your digital assets as collateral to secure loans. Thus, allowing you to get the cash you need without losing on the future price appreciation of your investments.
Peer-to-Peer Lending: Borrowing from Individuals
Peer-to-peer lending is one of the most up-and-coming forms of lending on the market today. Connecting borrowers directly to individuals willing to lend money for an interest rate, these types of loans have revolutionised the lending industry.
Largely occurring on an online lending platform, these transactions offer more flexibility, and sometimes lower interest rates than traditional banking channels. Eliminating the need for traditional financial institutions, these channels are an incredible investment for lenders as well.
Moreover, these loans are especially beneficial for borrowers with unique financial circumstances looking for individuals to fund their unique needs. What’s more, given that a number of these platforms are regulated by the Financial Conduct Authority (FCA), they are a safe and secure way to get loans.
To Sum It Up
From what we’ve seen, it is pretty evident that borrowing from traditional sources is not the only option you have. With an increase in alternative borrowing solutions, the world has opened up new possibilities for getting emergency cash when you need it. With a wide range of unconventional ways to get cash, these solutions can effectively help you deal with your unique financial circumstances.
Specially designed for people with a less-than-perfect credit score, these borrowing solutions bring about a new change in the lending market by offering fair credit to those who have been wronged by the credit score system. However, when it comes to alternative borrowing, it is incredibly essential to thoroughly understand their terms, conditions, risks and benefits before making a decision.
If you ever find yourself in a situation where you are in need of urgent cash and are struggling to get loans from traditional lenders, we suggest you try our unique ideas. However, make sure you thoroughly research potential lenders and only take loans from FCA-authorised lenders to avoid being victims of predatory lenders.
We hope this article has helped you expand your knowledge in the world of borrowing and allows you to deal with your financial needs effectively.
