Low on cash and wondering if borrowing money is a good solution? That’s perfectly normal as every adult needs to borrow money at some point in their life to meet the expenses for higher education, marriage, new home, new business, etc. Luckily, many reliable lenders and financial products can help you borrow funds when you need them.
While the nitty-gritty of money borrowing may vary depending on the type of loan you are seeking, borrowing is essentially the act of taking money from someone provided that you will repay it in the future along with interest.
Borrowing through chit funds is very easy and effective.
Factors You Should Consider Before Borrowing Money
However, there are certain factors you should consider before borrowing money:
- Loan tenure should ideally be short to avoid higher interest pay-out.
- EMI should be payable with the financial resources you possess.
- Look for lower rates on the money borrowed or transfer to a source offering lower rates keeping the foreclosure cost in mind.
- Tax benefits don’t equate to saving money in the long run, so don’t borrow money or prolong your loan repayment just to avail tax benefits.
- Borrow the minimum amount you need such that your EMI is less than 40% of your monthly income and your debt-to-income ratio is low.
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Best Ways to Borrow Money in India
8 Best ways to Borrow money online in India are:
- The Money Club Chit Fund Platform
- Personal Loan
- Peer-to-Peer Lending (P2P)
- Mortgage Based Borrowing
- Credit Card
- Mutual Fund
- Stock Portfolio
- Sovereign Gold Bond
A chit fund allows you to save as well as borrow money. With digitalization, chit funds have gone online, like at The Money Club, where a verified member can join a club from anywhere in India through a simple process. A group of people contribute monthly to the chit fund for a total duration equal to the number of members. The amount collected is given to the person who wins either by a lucky draw or an auction. The chit fund system gives high dividends at lower interest rates.
The Money Club is a fast growing digital chit fund platform where you can save, invest or borrow efficiently through your smartphone. You can start saving with an amount as low as Rs 200. You can also earn 3-4 times more interest than the returns from FDs and RDs. The total registered members of Money Club are more than 2.5 lakhs and the total number of users who have downloaded the app is more than 3 lakhs. Money Club has attracted people from more than 350 cities in India.
A personal loan can help you meet your current financial needs such as travel expenses, home improvement, emergency auto repairs, weddings etc. However, a personal loan typically cannot be used for higher education or a new house purchase. Although the tenure and interest can vary depending on the loan agreement terms, personal loans could be one of the cheapest money-borrowing options if your credit score is above 700.
P2P is also known as social lending or crowdlending. P2P platforms connect individual investors that are willing to lend their own money to borrowers. There is no financial intermediary involved in borrowing or lending money through peer-to-peer platforms, making it a bit risky. However, the peer-to-peer lending platforms could be useful if a borrower cannot get approvals from standard financial intermediaries.
A mortgage loan is one where you can secure funds by pledging your property. The interest rates on mortgage loans may vary from 8% to 12%. You can borrow mortgage-based loans from banks by availing up to 60%-70% of the registered property value with a repayment tenure of up to 15 years. A home loan can be used to purchase a home, while a commercial property loan can purchase commercial space. On the other hand, a loan against property can be used to fund a wedding, overseas education, home renovation, etc.
The fundamental concept of using a credit card is to borrow money for purchasing goods or services easily. The credit card company pays the merchant on your behalf provided that you settle the credit card bill on time. You can also get cash advance through credit cards, a short-term loan from a bank or an alternative lender. Cash advances on credit cards feature fast approval and quick funding, but on the flip side, they come with steep interest rates and fees.
Mutual funds can provide good returns to investors, as well as the ability to borrow against them in times of difficulty. Many banks and non-banking financial companies (NBFCs) offer loans against the amount you invest in mutual funds. It is just one type of mortgage loan. Its interest rate is lower than that of a personal loan and usually ranges from 9% to 13%. You can usually borrow up to 50 to 60 percent of the value of your equity mutual fund units.
Your brokerage firm may lend you money against the value of the stocks, bonds, exchange-traded funds and mutual funds in your portfolio. The amount you can borrow depends on the financial institution that provides the line of credit, although it can be up to 70%. Portfolio loans provide a way to get the money you need without having to sell investments.
Sovereign gold bonds are a popular investment as they eliminate the risk associated with holding gold in physical form. Government gold bonds can be used as collateral for loans from banks, financial institutions and non-banking financial companies (NBFCs). You can get a loan between Rs 20,000 to Rs 20 lakh.
Looking for Ways to Get Instant Cash
How to Borrow Money Online:
4 easy steps to borrow money online are:
- Define your requirements: What do you need to borrow the money for, how much and for how long?
- Check the options available: Which loan option fits your requirements the best?
- Evaluate each option: Consider the above-explained factors before borrowing money.
- Check the process: Apply for the loan based on the feasibility of the application process.
How To Improve Your Financial Condition
You can do 3 things to improve the financial condition of yourself and your home. After doing these 3 things, you will see that you will not need to ask for a loan from anyone, but you will be able to lend to others.
- Save money One is a very simple way, most people know its importance but still they are unable to deposit money. By saving money, you can avoid borrowing money from others in difficult times.
- Avoid extravagant expenses Many times we buy such things or waste money on those things which we do not need and later when the money runs out then we regret it. So avoid wasting money on unnecessary things as much as possible.
- Prepare a monthly budget At the beginning of the month, make a budget for the entire month and follow that budget. Separate what is important in the budget and what is not necessary, so that at the end of the month you know how much money you have spent where.
Borrow Money Hassle Free with India’s 1st Digital Chit Fund Platform
Why is The Money Club the Best Option for Borrowing Money?
The Money Club is India’s best AI-driven online chit fund platform which allows you to borrow money in times of need at a lower interest rate and with no paperwork. It is a secure and convenient way to borrow money in collaboration with verified peers. What’s more? You can get the money you need directly in your bank account while sitting at home.
The Money Club offers a gamified customer journey that allows you to proceed to higher amounts. The frequency of chits here can be as high as 1-3 days. So, get started and borrow the money that you’d need for an emergency, investment, business, or just savings.
Nowadays, there are many fraud loan apps and companies, due to which innocent people get trapped. In this post, we have told you about genuine ways to borrow money so that you can avoid fraudulent methods.