Should I Borrow, or Do Something Else?

Many people have noble objectives but it is tough to make them a reality because of adverse financial circumstances. Hence, they typically approach credit institutions for necessary backing, albeit with varying rates of success. There are numerous loan types to choose from, along with a list of lending corporations that offer them. However, with the appropriate fiscal disposition, acquiring credit should take relatively little effort.

However, these efforts sometimes prove futile on grounds of credit scores, security deposit requirements, income levels and other circumstances. Furthermore, upon approval, the dilemma of repayment becomes a heavier cross to bear – with respect to the risks involved with the venture and the absence of readily available repayment options.

Risks are inconvenient facts of life, and dealing with them becomes doubly challenging when a dead end is in sight. Loans are a viable source of funding, but can there be other ways that involve less risk? Are they any better?

Let us methodically discuss the potential alternative: Grants.

Eligibility for a grant does not require even one of the obstacles mentioned earlier when applying for credit. Truth be told, grants do not even originate from any loan establishment to begin with. Hence, no repayment is obligatory.

Instead, grant funding originates from government institutions or private philanthropic foundations. These organizations have an objective that correlates with helping people get back on track. A grant may be a sliver of hope as many lives have positively changed due to it.

However, there is no thing such as free lunch. There are some variables which undermine the viability of this alternative.

Hardly anyone knows that grants exist and even fewer know how they work. Moreover, eligibility requirements vary from one grant to another. Given an array of grants to potentially choose from, determining the optimum choice can prove to be exquisitely difficult. With the number of organizations to submit requests to, ascertaining the most effective writing style for a proposal is a daunting task. Essentially, it takes a degree of expertise and knowledge to facilitate navigation through these channels, and that is something that seems to be out-of-reach for most.

But then, the question still stands: Should one go for a loan or a grant?

It must be realized that the two options are not mutually exclusive. Thus, the question should rather be rephrased into which of the two must take precedence over the other.

From what has been thoroughly discussed, the following are clear:

1. Loans come with the risk of defaulting, while grants virtually come with none.

2. Credit applications do not automatically preclude the conferral of grants and vice-versa.

3. Grants come with no obligation for repayment. However, applying for one may be unmanageable for an average person.

With some assessment, the logical first-choice would be grants – only if one can find expert assistance for the application process. Honestly, it would be too cumbersome otherwise, so much so that the application period could have expired even before one actually finishes deciding whether to apply or not.