Experts say it’s more profitable to take out a mortgage or save for housing

The question “where can I get money right now?” occurs to many of us. Situations when you need finance are different: you need to urgently visit the dentist, repair your car or buy a new one, open your own business, go on vacation or buy a bag from a new collection. There is a difference in the desired amount, possible return period, and available collateral. Therefore, for each case there is a solution.

Our review contains many ways to find money - a lot or just a little, for urgent needs or to buy a home, from friends and through crowdfunding systems.

Where to go when you urgently need to get money before payday?

Microloans

Such loan products are micro-sized and must be repaid within a micro-term. Usually the borrower is offered only a few tens of thousands of rubles for a period of 1 to 4 weeks, sometimes for a couple of months. According to these parameters, microloans are ideal for borrowing before payday.

Another advantage of such loans is their availability. Upon receipt from the client, a minimum of formalities is required. Usually a passport is enough. And recently, you can apply for a microloan completely remotely, without even presenting an identity card. When filling out the online application, you only need to provide the following set of information about yourself:

• passport details;
• Contact Information;
• bank card or electronic wallet details.

You will be able to receive borrowed funds from microfinance organizations directly to a card or wallet of electronic payment systems (Yandex.money, Qiwi, WebMoney). The entire procedure takes just a few minutes – online applications are processed automatically and often around the clock.

To apply for a microloan, you must be an adult Russian citizen. Other characteristics are unimportant, although permanent registration in a specific region of the country is sometimes required. This allows students, pensioners and the unemployed to use the service. Even a bad credit history will not prevent you from borrowing – anyone can get some money.

It is convenient not only to borrow from an MFO, but also to return the money - in most cases, you can pay for the overdue loan, then your credit history will not be damaged. But there are also disadvantages to microloans - the interest rate is high and on average reaches 1-2% per day.

Credit cards

Another way to quickly borrow a small amount is to use a card with a credit limit. A credit card becomes a “bank in your pocket” and you can borrow money at any time by paying for purchases or withdrawing cash. But you need to arrange it in advance - before an urgent need for money arises.

To do this, you will need, at a minimum, a passport, and at a maximum, a certificate of income. All banks want to see the owner of a credit card as an adult citizen of the Russian Federation who has official employment and permanent registration in the country. The credit limit depends on the requirements for the client and the availability of funds: without certificates it will not be possible to borrow much. A positive credit history is also desirable; without it, the bank may refuse to issue a card.

Some cards are issued only during a personal visit to a bank branch, while others can be received by mail when applying remotely. For some credit cards you will have to pay annually - a service fee will be debited from your account, while others are available for free.

It is most convenient to use a credit card not for withdrawing cash, but for non-cash payments, then you can save on fees.

How to borrow without interest

Although not always, lenders provide the opportunity to borrow money for free - without paying interest. There are, of course, a number of restrictions, but there is still a chance to save on interest:

• The grace period for credit cards does not apply to all transactions (usually only for purchases), lasts for a certain period of time (20-55 days from the date of the transaction), you will have to incur additional costs (card maintenance, commission for withdrawal or transfer of funds). If the deadline or type of preferential transaction is violated, interest will have to be paid at the base rate, without concessions.
• Microloans at 0% - such special offers are made by microfinance companies for new clients - those who repay their first loan received here without violations or delays. It’s just that for clients “on the street” the approved amount is tiny, and there is also a short refund period. If payments are delayed by at least a day, you will need to pay interest in full.

There are no other ways to borrow from a bank or microfinance organization without interest. Unless, to save money, you can use loans from friends, or find special solutions for purchasing necessary goods in installments.

Where can I get a lot of money on credit?

Do you need money urgently and do you need a lot of money? In such a situation, a car pawnshop offers a solution, but you can also find a solution in a bank. The main condition is the availability of appropriate movable or immovable property to secure the requested obligations.

Loans from a car pawnshop

In this establishment you can quickly pawn your car and get money. The car owner is offered two transaction options:

• the documents for the car remain in the pawnshop - PTS, the borrower himself continues to use it, but is limited in transferring ownership;
• The car is left in the pawnshop parking lot, and the client does not have access to it until the loan is fully repaid.

At the same time, car pawnshops are increasingly requiring the issuance of a comprehensive insurance policy in order not to lose the pledged item as a result of theft or damage in an accident. Moreover, both vehicles that are pawned by the pawnshop and vehicles that the owners continue to use are also covered by insurance.

It is proposed to repay debts according to the scheme - interest monthly, and the full amount - at the end of the agreed period in a lump sum payment.

Loans secured by property

In situations where the most important thing is not the speed of receipt, but the period of repayment of funds, secured loans from a bank are suitable. It is proposed to return them within 5-10 or even 20 years if real estate serves as collateral. And loans secured by vehicles are issued for several years, and not for several months, as in a pawnshop.

A mortgage allows you to receive a large amount for a long period of time, but requires additional guarantees of return - insurance of the property. Also, a loan secured by a car requires that you take out a property insurance policy.

These insurance costs are important to reduce the lender's risk. Having an insured collateral makes it possible to borrow money at a low interest rate.

Installment plan

Some developers provide the opportunity to purchase housing in installments. She may be:

• Interest-free (the cost of the object is divided into equal parts, which the buyer pays throughout the entire credit period);
• Interest rate (in this case, an interest rate is charged on the established value).

But it is important to take into account that installment plans require payment of a down payment. Therefore, this option of buying an apartment when there is no money can only be relevant if you additionally use a consumer loan or the sale of property to make a down payment.

The key advantage of this form of purchasing real estate is the ability to purchase a property without interest. But there are many more disadvantages. Firstly, very few developers work according to this scheme. Finding real estate in any particular area will not be easy. Secondly, in this case you can only buy an apartment on the primary market. This means you will have to pay a large amount. Thirdly, you need to have a high enough income to be able to regularly make large payments over several months (the standard installment period is 12-24 months).

Urgent lending from individuals

The option to “intercept” the required amount before your salary is still relevant when solving financial issues. Borrowing a little without formalities is very convenient. And if you borrow from friends without interest, it’s also profitable.

Borrow from friends

Friends, relatives, and colleagues lend money without asking for a credit history or asking for proof of income. They can issue the requested money immediately. But too many “buts” can affect the deal:

• loved ones will not have the required amount on hand at the right time;
• they themselves need money in the coming days and they will not be able to provide a loan for the desired period, they will rush you to repay;
• there are no clear borrowing conditions, which can cause misunderstandings and disagreements;
• in case of problems with return, the conflict will negatively affect personal relationships;
• It’s not always convenient to talk about your own needs and goals to your family or colleagues.

Most problems can be solved by drawing up a loan agreement or a receipt, which specifies all the conditions for issuing money and returning it.

P2p - Lending from a stranger

There is another opportunity to get a private loan - without attracting funds from friends or relatives. On mutual lending exchanges, forums and p2p services, strangers lend money.

At their core, such private loans can be anything - the parties to the transaction can independently agree on the issuance parameters and repayment conditions. But different resources have their own rules for providing borrowed funds:

• Personal communication between users may be limited and funding may be automated;
• sometimes the platform is just a place for lenders and borrowers to meet - they independently discuss all the details and communicate outside the service.

This option is convenient, but the risks are high, which is why high fees are charged for loans in the p2p lending service. But you can find the best option - in terms of amounts and terms - and borrow without unnecessary formalities.

We are looking for money even if all banks and microloans have refused

Even in the absence of a financial cushion and the ability to borrow, you can survive difficult times using available resources. The recipe “earn more and spend less” only helps in the long term. There are also quick effective solutions:

• looking for part-time work and freelancing to quickly replenish your budget;
• renting out your own home and moving to your family or to a simpler apartment;
• sale of unnecessary assets - things are sold on bulletin boards quite actively;
• the property can be pledged to a pawnshop and redeemed when the financial situation improves.

Lending with bad credit history

You can’t give up on loans either. After all, having a damaged credit history does not completely block access to funds. There are microfinance organizations and banks on the market that provide loans even to clients with a bad credit history.

There are special offers that allow you to quickly improve the debtor’s reputation. The product “Credit Doctor” from Sovcombank is designed for this. For a fee, the client receives an improvement in his credit history, and at the same time a card with interest on the balance of his own funds and a life or property insurance policy. You won’t be able to get money in your hands under such a program in the first stages.

However, other loyal institutions are completely ready to provide microloans to clients with a bad credit history. With each fulfilled obligation, the corresponding notes will be entered into the dossier. This will allow you to whiten your reputation in the face of potential creditors slowly but surely.

Among these generous and unscrupulous lenders are mainly microfinance organizations and microcredit companies. Any bank will require the applicant to have no debts or arrears.

Where to get money to buy real estate

Buying a home requires a large investment. For the average family, such an acquisition is unaffordable at their own expense.

Mortgage loans

The solution is a mortgage. The bank pays for the property and until the borrower returns the entire amount with interest, the purchased apartment or house is pledged. It will not be possible to sell such living space without the special permission of the lender.

To save money when applying for a mortgage, we recommend:

• take advantage of preferential programs for certain categories of mortgage holders (young families, workers in a certain field, salary clients of the bank);
• make the maximum possible amount as a down payment - discounts start when you pay from 30-50% of the cost of housing at your own expense;
• use maternity capital or other certificates from the state to improve housing conditions;
• receive a tax deduction when purchasing real estate and use it to pay off your mortgage early.

A mandatory condition for issuing a mortgage loan is property insurance of the subject of the mortgage. Other insurance policies, for example, life insurance of the borrower, are only additional guarantees of repayment.

A number of banks offer offers to get a mortgage without a down payment or use matkapital as this contribution. Home insurance and deed registration costs can be added to the total loan amount. So there is a chance to get an apartment on a mortgage without money. And then you will have to make monthly repayment payments, similar to the amount of rent for someone else’s housing, but the borrower will already live at home.

Which mortgage is more profitable: on a primary mortgage or on a secondary one?

Buying a new building with a mortgage is easier than buying a resale property. Banks and developers have already developed a suitable cooperation scheme; the client can only declare his desire to quickly celebrate the housewarming party. Housing on the secondary market may not be suitable for the lender as liquid collateral, and more issues will have to be settled with the seller when finalizing the transaction. The cheapest way to purchase square meters is at the excavation stage, but this means a high mortgage rate - after all, there will be no collateral for some time. And in the period before the object is handed over, the borrower needs to live somewhere and spend additional money on rent.

Mortgage for individual construction

There are similar proposals for financing the construction of a house. Banks will be willing to finance the transaction if the client chooses a reliable developer - from among the companies that have previously collaborated with financial institutions and have been accredited. There is less chance of approval for a loan that goes towards building a house yourself. In any case, the bank will transfer funds in tranches - after a report on the progress of construction and completion of its stages. The borrower needs money for a down payment; a land plot acts as collateral, then an unfinished construction project, and then a finished house. Accordingly, the collateral will have to be insured.

Loan secured by existing real estate

It is optimal to already own real estate when you come to the bank, which will become collateral for the loan. For example, this could be the parents’ home, or a country house, a garage or a plot of land. Moreover, the mortgagor may not be the borrower himself, but his relatives. All this will help reduce risks, which means the mortgage rate.

Other home buying options

There is also an alternative to a mortgage for the purchase of housing or its construction:

• Rent with subsequent purchase - when renting a living space, you can discuss with the owner the possibility of purchasing it in installments. The tenant simultaneously pays for accommodation and makes partial payments for the complete purchase of the apartment. This is risky for the buyer, since the property will be owned by the owner for several years, and this transaction is not regulated by anything other than the terms of the contract.
• Lifetime annuity - this is how apartments are usually purchased from representatives of the older generation who have no heirs. It is enough to negotiate the living conditions of the elderly homeowner and regularly pay him a living allowance in order to subsequently receive ownership of his apartment. Such a will must be notarized, but it will not be possible to approach this transaction formally - too many personal factors can influence it.
• Housing cooperative - the down payment can be made gradually, in small payments, over several years. It will not be possible to obtain the right to living space right away, so at the same time you will also need to spend money on renting an apartment. Membership fees may be lost if the management of the cooperative is fraudulent or the developer goes bankrupt. And over the course of a few years, real estate prices may rise, family circumstances and income levels may change.

Rent agreement

An annuity contract is an agreement under which one person agrees to care for another in exchange for property owned by the person being cared for. In simple words: you follow a person, and in gratitude he transfers the apartment to you.

Important!

A rent agreement may imply the provision of not only housing, but also a specific amount of funds or another type of property. It all depends on the conditions specified in the agreement.

Typically, the annuity agreement is signed by single elderly people who own real estate, but do not have the ability to independently care for themselves and provide for themselves. In this case, a life annuity agreement is concluded. It obliges a person to fully assist the owner of the property until his death.

The main advantage of an annuity agreement is that there is no need for savings. You can get an apartment without a large starting capital. But it should be taken into account that caring for a person involves certain expenses (medicines, food, treatment). This is the first disadvantage. Also, the disadvantages of the annuity agreement include increased responsibility for a stranger.

Car loan – an opportunity to borrow money to buy a car

If you decide to get a brand new car, but you don’t have the required amount of money, then you can consider two options:

• if a car is purchased for use by a legal entity, vehicle leasing is available to him,
• If a private person buys a car, the most common scheme is car financing.

Types of car loans

Car loans are issued on various conditions:

• purchasing a new car at a dealer’s showroom with filling out an application from representatives of different banks present at the showroom;
• purchasing a new car at a car dealership through special affiliate programs of auto banks, with the opportunity not to pay the down payment or interest;
• buying a used car at a car dealership that cooperates with several banks, when an application is submitted to all of them at once and the appropriate option is selected;
• a transaction with a private car owner to purchase a used vehicle second-hand using a bank loan;
• trade-in scheme - the client trades in his used car to a car dealership, it is used as a credit instead of a down payment, as a result he receives a new car, and the difference in cost is taken out on credit;
• car loan with deferred payment - differs in that during the lending period the client pays only 50-80% of the cost of the car, and at the last stage can choose: full redemption of the car with a one-time payment of the balance of the debt, payment in installments of the remaining obligations, return of the car with offset of previously paid funds in as a down payment on a new car.

CASCO insurance against damage and theft is desirable for car loans, but not required. True, the risks in the absence of a policy are much higher, so the rate may be 5-10 percentage points higher than the option with insurance.

Investment

If you are planning to purchase real estate in the next year or two, but understand that with your current level of income you will not be able to save the required amount, start investing. You can do this even with a small capital: 5, 10, 50 thousand rubles. With the right approach, you can increase your portfolio by 50-100% in 1 month. The main thing is not to take risks. You can invest in stocks, cryptocurrency, small startups. There are enough offers on the Internet.

The key advantage of investing is the ability to quickly receive a large amount. But this method also has disadvantages. The main thing is high risk. If you take the wrong approach, you can lose all your money.

Where can I get money for business development and startup?

It is most difficult for small businesses to communicate with banks. After all, large and established organizations do not turn to banks for loans. But a businessman who is looking for money to develop his business is not a desirable client. The probability of issuing a bank loan to a beginning businessman is much lower than when approving loans to individuals.

Business development loan: difficult, but possible.

The most important thing when trying to raise money for a project is a business plan. Moreover, with this document in hand, you first need to contact the bank and listen to the opinion of experts.

If a loan is denied for objective reasons - unreliable calculations, incomplete analysis of the market situation, an unrealistic picture of development, errors in assessing the project and its risks - then it is better to rethink the idea. Banking analysts may assess the project more adequately and comprehensively, taking into account their own experience. If the reasons for the refusal are subjective: “we do not give out more than X thousand rubles to one person,” “you have just registered a company and cannot yet submit reports,” “our portfolio is full of similar projects, we no longer give money to this industry,” then It’s worth taking your idea somewhere else. The bank didn’t give it, private investors or the state will give it.

Do banks give money for startups?

Getting money to start a business is even more difficult. After all, the potential borrower only has a plan, but no real results. This means that it is almost impossible to convince the bank of your solvency. The startup himself does not yet know whether his project will take off or not, and the lender needs serious guarantees of money back.

The following steps will help you increase your chances of getting a loan to start your own business:

• Opening your own business as a franchise - according to a ready-made plan and an already known business model (Sberbank has a special preferential loan program for financing franchising).
• Payment for part of the project from your own funds - from 30-50% of the total starting capital.
• Request for funds secured by liquid property - obtaining a loan for the purchase of fixed assets, and not for other expenses.
• Registration of guarantees and guarantees in specialized business support funds.

But in general, there is no need to try to find a common language with harsh bankers. Start-up capital can also be obtained from other sources.

Crowdfunding - all over the world

You can also find money for the implementation of your business project under other conditions: collect sponsorship fees from future potential clients and simply investors who support the idea. Crowdfunding is crowd funding, that is, people give money for a specific project.

If you decide to launch your startup fundraising campaign, then you need to prepare the following:

• project description;
• its promotion according to the rules of the selected platform for attracting financing;
• acceptance of contributions;
• investor remuneration;
• a report on the intended use of the collected amount.

There are several such crowdfunding services on the RuNet, the most famous of which are Planeta.ru and Boomstarter. Here you can find sponsors and investors for projects in the field of production, creativity or scientific development.

Attracting a private investor

Another option for finding start-up capital is to attract funds from one or more private investors to the project. There is no need for publicity; it is enough to draw up a business plan and find the right person - it can be someone you know or a third-party business angel. There are entire associations and communities of investors and business angels who select projects and finance them.

When investing, a businessman gets a partner and it is important to clearly stipulate the degree of his participation in the project and the conditions for returning the funds raised. How will he influence the project, what will he manage, how much and when will he start taking money to pay off the debt, what kind of reward does he plan to receive? All this is important when attracting a private investor. The parameters of the transaction must be written transparently and clearly in the contract in order to avoid disagreements.

Grants and subsidies

You can get support for your business initiatives from the budget. The country has several federal and regional financial assistance programs for both start-up and existing small and medium-sized businesses. According to them, money for opening or developing your business is provided free of charge. You won't have to return them.

The project is reviewed by a commission and assessed according to many criteria, the main ones being the social component and the tax burden. To receive funding for these support programs you must:

• propose a project in a socially significant area, in a niche that is not occupied;
• create maximum jobs;
• bring innovation to activities and use new technologies;
• pay maximum fees and taxes to the budget;
• promise to spend the funds strictly for the purposes indicated in the program (purchase of real estate, purchase of machinery and equipment, etc.).

If the intended expenditure is violated, the money received will need to be returned. For several years after the grant or subsidy is issued, government officials will regularly check the operation of the business, arrange on-site inspections, and request reports and financial documentation for the project. If the actual data differ greatly from the forecast, the entrepreneur will also be required to reimburse the amount of the grant/subsidy.

Asking friends for help

If you confidently decide to purchase real estate, have a consistently high income, but do not have the capital to pay the down payment, ask your friends and relatives for help. Many people leave this method as a last resort, because... They are afraid of rejection from loved ones. To avoid them, it is enough:

• Ask for money at interest. Even a small benefit can interest a person. Also, interest is a guarantee that you will try to get rid of debt as soon as possible.
• Make a receipt. It must indicate the terms of the provision of money, the terms of repayment of the debt, and the personal data of both parties. The completed receipt must be certified by a notary in order for it to have documentary significance.

The main advantage of borrowing money from friends is that there is no need to collect numerous documents to obtain a loan. It is enough just to verbally discuss the possibility of obtaining the required amount and draw up a receipt. The disadvantage of this method is people’s caution. Relatives are not always ready to borrow a large amount. Even at interest.