If you’re looking into starting a business or a company in 2018, the current financial landscape in Australia would be a Godsend for you. Online loans and other alternative loaning channels are making waves today and their advantages over traditional bank loans have been staggering. For those who can’t qualify for bank loans due to numerous, unforeseeable reasons, online loans have become the viable option for those who need quick cash without the exhaustive processes involved in bank loans.
At &Solved, we open the channels to a good alternative to the traditional bank loan: a line of credit that we can help you process online.
What is a line of credit and why has it become a great alternative to bank loans?
A line of credit works similarly to a credit card as a flexible means of borrowing money. You can use this credit line by simply writing a post-dated cheque or in some cases, write off a set of assets as collateral. You can keep using this credit line as soon as you pay off the borrowed money, and the best part is you don’t have to make any payments until you use your credit.
As opposed to a personal loan from a bank, you have to start paying the entire amount plus interest as soon as you are granted the loan. You will be given a fixed schedule of payments that will reduce the payment until the loan is paid off.
Aside from stringent requirements, the maximum loanable amount in a personal loan would be completely dependent on your credit score. The interest that you have to pay would also be based on the entire lump sum amount that was granted to you.
With a line of credit, you only need to pay the interest of the amount you withdraw, not the entire credit line. Payment may not be scheduled like in personal loans as long as you pay all of the borrowed money and interest by the end of the term. Most line of credits, like online loans, are classified as unsecured loans which is why they can be approved faster than traditional bank loans. However, securing a line of credit with collateral can make the interest rates lower and the credit limits higher.
Online loans as an alternative to bank loans have become popular across the world. Australia is no exception. According to a study published by Equitise in 2015, Australia is on the precipice of a growing global phenomenon wherein technology is being used to invest and manage assets like never before.
5 things to consider when choosing between a line of credit and a personal bank loan
Securing a loan doesn’t have to be a chore
Nothing should stop an entrepreneurial mindset. These new alternatives to money lending have opened vast opportunities for individuals who want to build their small businesses and start-up companies without the pressure of tight financial requirements and spotless credit. If you’re looking for a financial lending company that can give you flexible low-interest loans to help you reach your dreams, our financial consultants at &SOLVED are always ready to help you.