Like it or loathe it, borrowing money is an inevitable part of life. Except if you are uber lucky, you will need to loan some money at some point in your life. It doesn’t matter how wealthy you are, you’ve been, or you’ve gotten; loans can become a necessity at any time. For example, you may need money to expand your current business, pay for college tuition, or handle a medical emergency that popped out of the blue! (You know what they say, life is full of surprises).
You could have one and a million reasons to borrow money, but what matters is where you are sourcing loans from. Today, there is a wide range of financial institutions committed to distributing loans. These include credit unions, banks, financial companies, peer-to-peer lending, and a host of others. So if you are considering taking a loan, you should pick the most suitable lending option.
The good thing is, we’ve researched on your behalf. Find below a list of verifiable options for sourcing money in 2021. Number 3 is highly recommended!
5 Foremost Money Lending Sources:
1. Banks
Borrowing money from banks is not a novel concept as people have been obtaining loans from banks for as long as banks existed. Banks have also improved their lending services over the years by repurposing existing options and launching new ones. Presently, one can obtain loans from this long-standing financial institution, including personal loans, mortgage products, auto loans, and etcetera. However, on the flip side, banks tend to charge steep fees for loan applications and services.
2. Credit Unions
Credit unions are cooperative institutions run by a group, community, or organization. A credit union typically lends money to its members only, so you have to join one to access its lending benefits. While they offer nearly the same services as banks, they are not controlled by the Government. Instead, they are nonprofit establishments with the liberty to lend money at more favorable rates and terms than commercial institutions.
3. Finance Companies
Finance companies are money-lending establishments that typically lend money on a short-term basis. Unlike commercial institutions and credit unions, they forego deposits and include financial products like safe deposit boxes, cards, and credit. Instead, they curate short-term loans for their clients on favorable terms. A good example in Australia is CashnGo, a one-of-a-kind short-term money lending platform that leverages technology to make loans more accessible, effortless, and stress-free.
4. Peer-to-Peer Lending (P2P)
Peer-to-Peer lending or social lending is a contemporary form of money borrowing that allows individuals to directly obtain loans from each other without institutional intermediaries like banks and brokers. Simply put, it is a lending service without go-betweens. However, P2P loans require more effort, time, and risks compared to statutory financial institutions.
5. Public Agencies
Public agencies are lending outfits sponsored and controlled by the Government. They provide robust funds that can be repaid over an extended period. Additionally, they offer lower interest rates than private lending sources. On the downside, securing a loan from these agencies demands grueling paperwork. Plus, not everyone is deemed qualified to obtain a Government chartered loan due to strict income and asset requirements. Nonetheless, it is one of the best sources of lending money in 2021.
The Last Word…
There are many money-lending sources to finance your needs in 2021. From banks to credit unions to finance companies, the options are endless. However, we advise you choose the option that best suits your interest and financial standing.
