Personal Loan Alternatives

There are times when you are in a bit of a situation financially and need some urgent cash right away. The sum involved is not a lot but the time of need is of greater importance. The first option that comes to mind in situations like these is applying for a personal loan.

Personal loans, usually are of small amounts and are granted sooner than the other loans, for instance business loans, where the business plan, cash flow and break-even point need to be examined. While a personal loan is not a bad option for many, there are other alternatives in the market that you can make use of in times of urgent need. Some of these options include loans against fixed deposits and gold loans.


  • FD Loans: This is one of the quickest ways by which you may acquire a loan from a bank. If the bank happens to be one in which you already hold an account, then it becomes easier to get a loan from the bank. What makes this the quickest option is that the bank already is in possession of the collateral you want to offer them as security to cover for the loan you want to apply. In addition to that, the repayment for this type of loan is to be done within the proposed term of the fixed deposit itself. The paper work involved in this type of loan is also very minimal and the loan amount that can be granted is also more than 80% above the value of the fixed deposit. The deposit continues to earn you interest also even when the loan has been sanctioned. One thing you have to take care of, however, is to ensure monthly payments to cover the loan are prompt. These monthly payments are just like that of EMI.
  • Gold Loan: This method of borrowing money is very old. It has been in practice for centuries. What started in rural and semi-urban areas as a scheme for financing and source of income or lenders has pretty much caught the fancy of those living in the metros. What makes it so popular is the fact that the owner does not have to sell the gold in form of jewelry or otherwise in his possession and still get the money he needs right away. Gold also offers instant liquidation to the owner and this is another added advantage as it can be readily deposited to the lender as collateral for the amount of loan needed by the debtor. Another advantage is that the debtor does not have to bother with showing credit history to the creditor for the loan to be granted.

There are other ways to get loans on short notice other than the two mentioned above. You can avail loans against property as well. These loans are calculated on the value of the property. If the amount you need is a little more than compared to personal loans, this can be your best option. Loans are also granted against shares, life insurance policies and provident funds.

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