where you can borrow money

6 places where you can borrow money

There are a lot of options out there if you need to borrow money. Whether you need to finance emergency expenses or borrow 200 dollars, there is something out there for you. Remember to weigh all of your options to find one that is best for you.

woman is holding purse, credit card in hands and calculating the costs. Pink table. Flowers on the table. hand holding brown purse. Red calculating.

If you are looking for extra cash to consolidate debt or pay a medical bill, it can be stressful if you are unaware of your options.

Each option has a different list of pros and cons. Let’s go over each option so you can be better informed about the borrowing option right for you. For many of these options, you must be at least 18 years of age to qualify.

It’s important to note that there is always a cost to borrowing money, even in zero interest situations like borrowing money from friends and family. For example, utilization (the amount of your credit that you use at any point in time) will increase that could lower your credit score. Borrowing money from friends and family can also cause strife or tension even if the loan is paid back on time with or without interest. 

Consider your options carefully, and consider them all to avoid selecting one that places you in an uncomfortable situation. It may make more sense to borrow from a bank than an uncle even if the cost is higher. 

Banks

Banks offer their customers the option to take out a short term personal loan. Some banks even offer loans with no origination fees. Origination fees are upfront costs that cover administrative expenses to process your application. That said, the borrower is required to pay interest and the loan principal on the specified dates.

Existing bank customers may also receive other benefits such as interest rate discounts. If you maintain your bank accounts with them, other loyalty-based discounts may apply.

As attractive as these bank loans may seem, not all financial institutions offer personal loans. In addition, approval for bank loans often requires a good or even an excellent credit history to be approved. An extended relationship with the bank may be required to secure the best loans. 

Credit Unions

Personal loans from a credit union may be a better option than one from a bank. Credit unions often offer lower interest rates and less fees than a bank will. A credit union’s goal is to return profits to their members, not to their shareholders. 

In order to apply with a credit union, you must meet their eligibility requirements to become a member. These requirements may include place of residence, connection to an employer or school or family ties to a current member.

Online Lenders

Online lenders are another alternative to traditional personal loans. Often, online lenders do not have the additional costs of maintaining physical store fronts. In addition, they offer great user experience from their digital application process.

Online lenders also promise fast funding, dispersing your money one business day after approval and offering a variety of types of loans.

Be sure to do plenty of research before borrowing from an online lender you are unfamiliar with. Remember to check with traditional lenders as well to see who offers the best interest rates and loan terms.

Payday Lenders

Payday loans are short-term loans for relatively low loan amounts, such as a 200 dollar payday loan. These loans can be applied for through traditional means or through payday loan online lenders. 

However, payday loans can be very expensive and should only be used as a last-resort. 

Terms and conditions vary by state, but they typically must be repaid by your next payday. They also have very high APR because lenders charge extra fees based on a percentage of each $100 borrowed. If you cannot repay the loan by the expected date, the lender may extend the due date and charge additional fees.

Cash Advance (from a credit card)

You can also use a credit card for a cash advance. These loans have no credit checks and require no loan request forms or applications. It is important to note that these loans are against your line of credit and have high fees.

Fees include high interest rates that are charged as soon as the cash is withdrawn and other fees to withdraw the cash. These loans are instant and simple, making them an attractive option. However, due to high interest rates and other fees, it is important to weigh some of your other options first. 

Friends and Family

Asking to borrow money from family or friends can be an uncomplicated way to get cash when you need it, since they come with no contracts. In addition, they can help you if you have poor credit.

However, the relational implications of these loans can make for strained relationships and awkward family gatherings if disputes arise over loan repayment. 

If you need a loan with a bad credit score, this may be an option for you, but it also will not build your credit score and other options should be considered.

What now?

If you need cash, these options can all be great for you. Remember to research each option and see which one best fits your needs. Here are some important things to keep in mind when applying for a loan today:

  • Why do I need this loan?
  • What is the interest rate?
  • What fees are charged?
  • How long is the loan term?
  • Will this result in a hard credit inquiry?
  • What happens if I cannot repay my loan?
  • If it’s a student loan, file your information on FASFA
  • If you hold a retirement account with your employer, inquire as to whether you can utilize a 401 K loan from your employer-funded retirement account. 

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