It’s common for people to need more money than they have saved to purchase a home, car, pay tuition, or repair their homes. They may also need an emergency loan if they are running short on funds until the next paycheck.
There are many options for borrowing money, and each one has its benefits and drawbacks. Understanding how to borrow money can help consumers make good decisions.
How to Borrow Money Quickly
Sometimes a person needs a loan as fast as possible. If a credit card or other line of credit is not an option, an alternative is borrowing money with a quick cash loan. Borrowers that apply online and are approved have access to the funds as soon as the next business day*.
Where to Borrow Money
There is no shortage of lenders willing to work with qualified borrowers. The choices narrow if a person has bad credit, little income, already owes too much money, or does not have any collateral.
Here is a list of seven places many consumers borrow money.
1) Friends and Family
For a person needing to borrow money, close friends and family members may be willing to help. The good thing about borrowing from loved ones is they will not subject the borrower to a credit check or lengthy application process. They also may not charge interest. The drawback is, if the borrower does not pay them back, there could be permanent damage to the relationship.
2) Online Lenders
People are no longer limited to borrowing options by the confines of their city or town. The internet gives consumers wider opportunities by connecting with online loan. It is convenient and easy to apply for an online loan directly from a home computer or smart device. When an applicant is approved, the funds go directly into the designated bank account.
3) Banks or Credit Unions
A borrower may qualify for a personal loan at a local or online bank or credit union. Lending institutions typically use a borrower’s credit history and income to approve the loan, so no collateral is generally needed. However, an unsecured loan poses a higher risk of default, making interest rates higher than on a secured loan. These rates may increase if a person’s credit score is low.
4) Credit Cards
Credit cards are convenient ways to borrow money fast. There is no waiting period or application process if the borrower already has been approved for a credit card.
5) Personal Line of Credit
If a borrower needs funds for an unexpected expense, if they are running short on money that month, or if they want to consolidate other debt, they may opt for a personal loan. This type of loan provides the consumer with access to funds they can draw from at their discretion. A personal line of credit is typically unsecured, so borrowers don't have to worry about putting an asset up as collateral.
6) Home Equity Line of Credit (HELOC)
Homeowners with property equity can tap into the equity with a HELOC. Interest rates tend to be lower on a HELOC than on personal loans, as the loan is based on a home’s equity. The drawback to a HELOC is they could lose their home if the borrower does not repay the loan. In addition, this type of loan does not help a person who has not built equity in their home.
7) Retirement Plan Loan
A person may borrow against their 401(k)-retirement plan if they need money. There is no application process, and the terms are usually favorable, as long as the person pays it back.
Convenient Options For Borrowing Money
When researching how to borrow money, the wide variety of interest rates and fees available may be shocking.
Unless a person receives a loan from their loved ones, interest and fees will most likely be required. Consumers should shop around if they have the time to ensure they choose the loan that costs them the least amount of money.
Some convenient options to borrow money are:
1: Borrowing money from friends or family. Securing a loan from parents, siblings, or close friends is usually the most cost-effective option. Loved ones will probably not charge interest, which can decrease the total cost dramatically. Borrowers may be able to pay them back with less strain on their budgets.
2: A HELOC. A home equity line of credit is one of the least-expensive options for borrowing money. Since it’s a secured loan (with the home as collateral) there is less risk to the lender. Less risk equates to lower interest rates. Some lenders also offer low closing costs on HELOC and generous repayment terms.
3: An online loan. Taking advantage of the numerous options of loans available online can help consumers navigate difficult, unexpected, or emergency situations. Online loans provide flexibility options for consumers who need to borrow money.
Plan to Pay Back Your Lenders
Repaying a loan is crucial to protect a person’s credit score and financial stability. Anytime a consumer borrows money, they need to have a plan for paying it back.
Here are some smart tips for making sure a loan is repaid.
Make a Budget
People who lay out and follow budgets are more likely to be financially stable. Consumers should create a budget around their income and bills, being sure to include the new loan payment. Having it built into the budget makes it easier to pay it, rather than treating it as an unwelcome surprise.
Set a Reminder
Time passes fast, and it is easy for due dates to pass without realizing it. Setting an alarm on a smart device 5-7 days before the payment is due is an easy way to make on-time payments.
Borrowers can take the pressure off by setting up online payments through their checking accounts. Scheduling the payments can minimize the chance of missing a payment, or even paying late.
There are many options for borrowing money. Some are cheap, some expensive, some are quick, and some may take longer to procure. The variety of loan choices is wider for people who can prove they have the income to repay the loan, along with a history of paying loans back on time. Borrowers who take out loans have a responsibility to repay them with the agreed-upon terms.
Do you need a loan quickly? Our company exists to help consumers acquire the money they need to cover expenses, repairs, or any other life event. Contact us to get started today.