If you are looking for a short – term loan, then secured loans can be an answer to your query. However, as feasible as it sounds, it does come with a few chinks in the armor.
Secured loans require pledging your property, vehicle or jewelry as collateral, until the repayment of the loan amount. Moreover, the collateral may be seized away from you on the non – repayment of loan amount. So if you are not willing to pledge any of your prized possessions, and do not want to be a defaulter of a huge personal loan then unsecured loans, with high interest rates, may provide a solution.
Moreover, the limit of an Over Draft facility extending to stocks and MFs could vary with the value of the security. Hence, the borrower needs to regularly monitor its usage. Besides, the OD facility is subject to periodic review.
Credit cards can also serve as an option here. However, the urge to constantly swipe the card must be controlled, along with the judicious use of financial resources.
Though as much as secured loans may seem lucrative for short – term borrowing requirements, remember the following advice, “Borrow if you think you can repay the money comfortably shortly, and always borrow within your means. Never fall in a debt trap.”