The requirement of money can arise at any time. You may suddenly need money. In such times, people usually do not care about the interest rate at which they are getting the loan, they just want to fulfil their immediate needs. No security is kept for taking a personal loan and this is the reason why this loan is the most expensive one. Meaning its interest rates are said to be the highest. Despite this, people go for it whenever there is a need for money. Before giving a personal loan, lenders assess the borrower's credit record and ability to repay the loan. However, if a little patience and prudence are used, money can be arranged at cheaper rates than personal ones. Check these alternative ways given ahead to get a loan cheaper than a personal loan:
Taking a loan against life insurance policies is much cheaper than a personal loan. Generally, people have more than one endowment policy with a bank. The practice of term insurance has gained momentum in recent years. Taking a loan by mortgaging a life insurance policy is cheaper than a personal loan from a banks. This option can be used instead of a personal loan.
If a person is employed, he/she can withdraw money from his Public Provident Fund (PPF) in an emergency. The thing to note is that a person cannot withdraw the entire amount from the Public Provident Fund and for withdrawal, it is also necessary for the PPF account to be more than 5 years old. After 5 years, you can withdraw 50% amount from the PPF account if needed.
The people of India are very fond of gold. The women in the family have gold jewellery. Gold loans can be taken in case of sudden need of money. Apart from non-banking financial institutions (NBFC), most banks provide gold loans. Its interest rates are lower than personal loans. Generally, it is available at an average rate of 10.50-17 per cent.
These options may take a bit more time but will give you money at much cheaper rates than a personal loan.
