A Safety Net In Challenging Times

2020 has been a year of unprecedented change across every single part of the globe. Where once we had security, stability and economic growth, now the opposite is true. Covid 19 has changed everything, and nobody knows when things will return to normal.

To their immense credit, governments worldwide have done their best to limit the impact of the virus. However, it has proved very difficult for them to deal with the sheer scale of the crisis. Huge numbers of people have lost their jobs, their salaries cut, or been placed on government-supported wage schemes. Business owners in virtually every single industry sector have seen their revenues tumble, and many companies may never recover. If there is one consolation, however, it is this: in time, like every single previous crisis, this pandemic will pass.

Alongside the health risks and social disruption caused by the virus, many people now find themselves facing financial difficulties. Some astute individuals had the foresight to save for a rainy day, but if that is not you, a personal loan may be the safety net you require to get you through these tough times.

Naturally, when people need a personal loan, the first place they usually look is to their bank, building society, or credit union. However, there are two problems with this approach. First, many of these institutions are simply not lending at the moment, and second, for those that are, loan amounts are often limited, the conditions very strict, and the rates high.

Alas, the days of a local manager who knows you and your circumstances personally are long gone. Decisions on loans are now made by centralized staff and clever algorithms, not at the discretion of a trusted and familiar part of your local community. Where once you could secure a loan with ease, you may now find the process much harder, particularly if you have lost your job or had your income reduced.

If you need a loan, it is always worth inquiring with your existing financial providers, but there are many other options worth investigating.

Alternatives to Traditional Loans

The French have a very apt proverb for our present situation: “hunger chases the wolf out of the woods.” In other words, in hard times, we have to move out of our comfort zone and look for solutions elsewhere. If you have been turned down for a loan, here are some alternative options:

Credit cards: for the (very) short term, credit cards are an option, but do not be tempted to use them in the long term: rates are very, very high!

Remortgage: this option is definitely worth exploring. House owners often forget how much equity they have in their house, plus mortgage providers usually offer very competitive rates, especially if you are prepared to switch.

Government supports: only when you start looking into it do you realize how much assistance governments can give you. Alongside practical support services with expert advice, grants, and guidance, some governments are now even offering loans, particularly at a local level.

Family members: during the pandemic, certain sections of society have been unaffected financially, for example, people who work in the civil service or public sector. If you cannot secure a loan, perhaps you have a sister in the police force or a teacher brother who might act as a guarantor for you.

Thinking Outside The Box: Online Loans

The internet has opened up a raft of new ways to do business, and that applies to personal loans too. As with all things internet, you need to tread carefully, but the reality is that the vast majority of online lenders are fully regulated: they are as safe and secure as brick and mortar lending institutions. Obviously, you still need to do your due diligence and checks, but you should always include online lenders on your loan comparison list.

Applying for a loan online has a number of advantages. It is very easy to apply, the whole process - from initial application to receiving the funds - is extremely quick, and because different criteria are used, you may be able to secure a loan where a traditional lender would turn you down.

If you are interested in seeing some of the options for online loans, why not check here? It may come as a pleasant surprise to see how good the service is, and how competitive the rates are.

Let the Buyer Beware!

Many people simply go down the traditional route when borrowing, but we think you should always consider looking online too. Whichever route you take, however, the same rules apply. Always shop around, always compare rates, always be aware of terms and conditions (a lower interest rate but longer term loan period may end up costing you more, for example), always read the small print, and always do your due diligence. Then, with your safety net in place, you can look forward to the future with greater confidence.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes