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Make Money: Alternatives to Loans

Date Added: August 08, 2011 02:31:21 PM
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Make Money: Alternatives to Loans




Obtaining the right loan, with the right conditions and payment terms will require some searching. These days with unsecure employment or threatened redundancies, it is difficult to obtain that good affordable loan that you have always dreamed of.

If it is small loan, you could ask the wife or relative or a friend. For larger loans there is normally a full investigation to be carried out including credit checks.

A money exchange is useful place to start with to obtain a small loan. The money exchange involves both the saver and the person taking out the loan. The person who is the saver will get interest on his loan and the person taking out the loan will pay interest. In turn the money exchange will take an arrangement fee to cover its expenses in administrating the loan. The money exchange spread the risk over a number of customers and this reduces the risk of default. No one person has all of its money at risk.

The exchange also carries various credit checks and has a history of those who are safe or those are more risky in defaulting on their loan. The more the risk involved the higher will be interest charged.

The exchange provides these small loans at affordable rates. Members of the exchange can place their cash in the loan pool from which the exchange can lend to other members.

The money exchange club is helpful to those who need the money quickly and can afford to pay it back on time or early. The risk involved for all members is relatively small when spread over many loans.

Similar to money exchanges is the credit unions, whose members will lend money at reasonable rates. The loans can normally spread over a number of years for either unsecured or secured loans. The credit union automatically takes out payment protection insurance on your loan just in case you will default on the payments, such as in the case of uncertain death.

Another type of loan can help, if you consider credit cards. There are a few credit cards which will give zero percent interest rates for a short period and therefore,

advantages can be taken of these low or zero rate interest loans. Again, the credit card company will carry out a credit check. Every time you take up a credit card loan there will be a fee to be paid.

There are other loan providers but their interest rates can be very high, try to avoid:
•    Pay day loans.
•    Pawnbrokers.

In the end, loans have to be paid back and if you cannot afford to pay back the loan payments, don’t take one up. Try to borrow or work longer or save a little every week until you have the amount of money that you need.

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