How Online Lending Proved to Be useful During The COVID-19 Pandemic

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emmanuel

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Published on October 9, 2020

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Amidst the coronavirus pandemic, many business establishments were forced to shut down, which resulted in massive unemployment. The situation lasted a few months before the government decided to reopen the economy following the new normal protocol.

Remote working is highly encouraged to implement the new normal practice in the workplace. However, working in your job’s workplace itself is not prohibited as long as employees and employers alike follow the strict guidelines in physical distancing, wearing face masks, and regular hand washing.

Lending Company’s Role During The Pandemic

Lending companies played an important role in the lives of the people today. Even though businesses already resumed their operations, employers cut off expenses by either laying off their employees or reducing their salary. 

With the said implementation of most businesses, people were left with inadequate income. This is where lending companies come in. More and more people need extra cash nowadays to help them pay the bills, purchase their needs, and even for health reasons. 

Loans, especially cash money loans, have become the temporary alternative source of cash for many individuals. However, people who wish to seek assistance from lending institutions may encounter a stricter process, particularly new customers.

Lending companies are helping individuals with their monetary needs and businesses who need extra cash for various reasons like reopening costs, for example. Many small businesses need extra cash to finance their reopening, and this is where the lending companies can help. 

Loans You Can Use During The Pandemic

Here are some of the loans you can apply for:

Personal Loan 

Personal loans are a fixed amount loan with a fixed interest rate that can be paid within a specific amount of time. Personal loans are offered by banks, credit unions, and online lenders. 

A personal loan is categorized into two: secured and unsecured personal loans. A secured personal loan will need collateral, while an unsecured personal loan will only be based solely on the borrower’s credit score. 

Business Loan

Business loans are what businesses can acquire during the pandemic to help them with their business’ finances. It is the same as a personal loan, where businesses can borrow a specific amount of money with a set amount of interest rate they must repay within a certain period. 

Bridging Loan

A bridging loan is a loan made available for the public to help them bridge the gap in their finances during the pandemic. If you need to pay or purchase something essential, like medicines, utilities, or daily necessities, but can’t because you’re still waiting for your funds to be available, you can apply for this loan option. 

A bridging loan is a short-term loan that usually lasts up to 12 months or less, and is available for businesses and individuals who wish to acquire extra funding. 

Homeowners Loan

A homeowner’s loan is commonly referred to as a secured loan because a borrower can loan a large lump sum of money with their property as collateral. The homeowner’s loan is only available for homeowners. 

Guarantor Loan 

A guarantor loan is a type of unsecured loan where borrowers need to bring a third party into the agreement to act as the guarantor of the loan. If the borrower defaults, the guarantor will be the one who’ll shoulder the repayment of the loan. 

This loan gives individuals with a low or no credit score an opportunity to still acquire a loan’s assistance. These individuals can apply for a guarantor loan if they are turned down by lenders they previously applied to. 

Debt Consolidation Loan 

If you have an existing loan or have your credit card bill piled up due to the pandemic, you can apply for a debt consolidation loan to help you pay your debt obligations. Combining all your debts will let you have one repayment schedule every month. 

Having a single repayment monthly schedule is easier and more manageable than having multiple repayments lined up in just one month. It will allow you to track your cash flow easier. 

Government Loan 

The government is offering their constituents financial aid through a series of government emergency loan schemes such as a bounce-back loan scheme and an interrupting loan scheme, among others. 

In order to know which government loan scheme fits you, it is best to do your research via the Business Bank’s Finance guide. If numerous private lenders have turned you down, you can apply for the government’s loan schemes. 

Finding the best loan for you is straightforward. There may be so many options to choose from, but you will know if you are eligible for a specific loan by familiarizing each option. During this pandemic, everyone needs extra cash to help them cope up with their needs and obligations. 

Takeaway

The lending business proved its usefulness during the pandemic by helping people acquire financial help through the services they offered. Lenders made various loan options for individuals with different needs and capabilities, including individuals with low or no credit scores. 

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