What are the best alternatives to personal loans?

When you need quick access to money, a personal loan can be helpful. Additionally, there are no end-use limitations on this collateral-free loan. But did you know that you have a number of additional possibilities to choose from in order to receive the money you require? The numerous alternatives to secured loans or personal loans that you might take into account when you require money immediately.

Loan against Fixed Deposits

The amount of your fixed deposit (FD), which is a type of short credit, is eligible for an overdraft facility offered by banks. Normally, you are eligible for a loan sum equal to up to 90% of the FD amount. With the least amount of paperwork needed, this process is the fastest. You can continue to accrue interest on your FDs without having to break them if you choose to take out a loan against them.

Loan against Insurance

A great secured loan option and a personal loan substitute is a loan against insurance. If you choose this loan, you can borrow up to 85% to 90% of the policy value by pledging fully paid life insurance policies. It should be noted that you cannot use money-back plans or unit-linked insurance plans (ULIPs) as collateral to obtain loans against insurance. To cover damages, any unpaid EMI sum will be subtracted from your insurance sum.

Loan against Credit Card

In essence, a loan against a credit card is a personal loan that is not secured, which may result in lower interest rates. You must use your credit card to submit a personal loan application for this. The bank deposits the loan money into your savings account if you satisfy the conditions. You can repay the loan over a variety of terms. However, many best money lender in Singapore will assess your credit history and spending habits, just like with Personal Loans.

Loan against Mutual Funds

Loans on mutual funds are another option for personal loans, but you have to come to an arrangement with the financier to borrow the purchased units. The loan amount is less than what the mutual funds are worth in the market.

Loan against Property

Properties without any debts attached to them may be eligible for a Loan against Property (LAP). The larger loan amount offered by LAP typically 80% of the property’s value is a notable advantage. As the property is used as security for the loan, you also benefit from cheaper interest rates. Since LAPs aren’t home loans, you can use the loan amount without the lender’s involvement.