Borrowing money is generally necessary when a household wishes to carry out a project. However, it is not compulsory to go through a bank to finance your project and alternatives exist to borrow money without the approval of a financial organization.
Borrow without going through banks
Financing a project generally requires financial resources commensurate with the project.
However, it is sometimes necessary to borrow money in order to make the project happen. There are several ways to do this, such as soliciting a banking organization in order to make a bank loan.
However, this type of loan requires a favorable situation for repayment but also involves an interest rate and various ancillary costs thus increasing the cost of credit.
To avoid these costs, there are other types of financing to finance a project:
- Loan between individuals
- Solidarity financing
How to borrow without a bank?
Borrowing without a bank requires to be properly informed about project financing like those mentioned above.
Thus, the loan between individuals is a solution that is not favored by borrowers but remains a financing option. Its operation is modeled on that of the bank loan but leaves the two parties to agree on the terms of the loan as well as its repayment.
Can be obtained near the family, relatives or associations, it is still advisable to formalize this type of loan to avoid any incident during the repayment of the latter.
Also, the borrower can have recourse to solidarity financing. This type of financing can be managed by associations allowing individuals to use their savings to finance certain local projects. Interest rates are generally low but the project must appeal to investors, which can be difficult during a personal project.
The borrower can also use crowdfunding. Also called crowdfunding, this type of funding allows many individuals to participate within their means in one or more projects posted online on different funding platforms.
Crowdfunding can also be applied in parallel with the two other types of financing, namely the loan between individuals and solidarity financing in order to increase the chances of success of the project.