A personal loan is an easy unsecured financing option available for self-employed professionals and salaried individuals to meet personal and business needs. While taking a personal loan is easy, and you don’t require any security or collateral, there are chances that your personal loan application is rejected. It may be because you don’t meet eligibility requirements for income and creditworthiness. In such scenarios, you can consider the following financing options available to meet short term as well as long term financial needs.
Alternative Loan options similar to personal loan: If you have a collateral or invested in a security, there are multiple loan options available to you.
1.Loan against PPF account: You can take a loan against your Public Provident Fund deposits between the third and sixth financial year of making the deposits. You can take a loan up to 25% of the total deposits which can be repaid as a lump-sum amount or in more than two EMI’s within a tenure of 36 months. The interest of loan against the PPF is more than the interest received on PPF deposits and may vary from bank to bank.
2.Loan against fixed deposits: You can take a loan against your fixed deposits without breaking the FD and continue receiving the interest on your FD as well. The amount of loan depends on the deposit, and you can get up to 90% of the deposit for a tenure up to 5 years. The interest rate on loans against fixed deposits is lower than a personal loan, and you don’t require a CIBIL score to get a loan.
3.Gold loan: The most significant advantage of taking a gold loan is that you don’t require any income proof and can be availed with minimal documents. A gold loan can be taken by pledging your gold for a tenure up to 36 months. The rate of interest on a gold loan is generally lower than a personal loan, and currently, you can get a gold loan ranging between 9.10% p.a to 12.00% pa.Another option you can consider is cash against gold. Gold Loan lends 75% at LTV whereas You can also avail Cash for Gold which would be 99% around the actual value.”
4.Loan against securities: Loan against securities available on securities such as share, mutual funds and insurance policies can be availed at the interest ranging between 9.5-12%. Loan against share is available for loan amount up to Rs. 20 lakhs and can be renewed annually for 50-60% of the market value of the shares.You can also get a loan against your LIC policy up to 90% of the surrender value of LIC endowment policies. The minimum tenure to get a LIC loan is six months, and the rate of interest can range between 10% -12%. There are no pre-payment or foreclosure charges on a LIC loan.
5.Car loan: You can get a car loan ranging between 3 years to 8 years based on the value of your car. You can get a car loan up to Rs. 1 crore. To take a car loan, you don’t need to keep the vehicle with the bank but can use the car. Presently, the interest rate on a car loan can range between 8.60% to 11.50% pa.
Conclusion: A personal loan, with no restriction on end-use, is one of the most popular options for availing finance, however, various loan options against the securities and investments are also other alternatives to avail an easy loan with no CIBIL and minimal documents.
Summary: Alternate Loan Options available similar to personal loan
While taking a personal loan is easy, and you don’t require any security or collateral, there are chances that your personal loan application is rejected.In such scenarios, you can consider alternative financing options available to meet short term as well as long term financial needs.
Alternative Loan options similar to personal loan:
-
- Loan against PPF account: You can take a loan against your Public Provident Fund deposits between the third and sixth financial year of making the deposits up to 25% of the total deposits.
- Loan against fixed deposits:The amount of loan depends on the deposit, and you can get up to 90% of the deposit for a tenure up to 5 years.The rate of interest exceeds 1-2% than the interest received on FD.
- Gold loan: A gold loan can be taken by pledging your gold for a tenure up to 36 months. The rate of interest on a gold loan is generally lower than a personal loan, and currently, you can get a gold loan ranging between 9.10% p.a to 12.00% pa.
- Loan against securities: Loan against securities available on securities such as share, mutual funds and insurance policies can be availed at the interest ranging between 9.5-12%.
- Car loan: You can get a car loan ranging between 3 years to 8 years based on the value of your car. You can get a car loan up to Rs. 1 crore.Presently, the interest rate on a car loan can range between 8.60% to 11.50% pa.
