6 Different Ways to Borrow Money
The rise of the Coronavirus has led to the decline of the economy. For some of you, the economic fallout has personally depleted your bank accounts.
Be assured that you have funding options to meet all your obligations. Different ways to borrow money will allow you to choose the path that fits your life.
Make the choice to be financially savvy during these lean times.
Table of Contents
1. Unsecured Personal Loans
If you only need a small amount to bridge you for the next few weeks, then an unsecured personal loan may be good for you. These loans are smaller amounts below $5,000, and they have fair interest rates.
Do not use this option if you think it’ll be years before you financially recover.
2. Borrow Money From Family
Family will back you through thick and thin. They are usually nicer than a bank when it comes to repayment, and you probably won’t have interest rates.
Only borrow money from family if you fully intend to pay it back in full. To show your good faith, give them the title to your car or an expensive watch to hold as collateral.
3. Credit Card Cash Advance
Certain credit card companies will let you draw cash against your available credit line. These transactions are approved within a couple of days offering you quick financial relief.
It is one of the fastest options to get funding, but it’s also one of the most expensive. Interest rates from a credit card company can reach up to 30%.
This means that for every $100 you borrow, you’ll owe $30 on top. Failure to make monthly payments can mean additional penalties.
4. Online Lenders
A person doesn’t have to walk into a bank and get a loan anymore. There are online lenders that can approve you as quickly as possible.
Different lenders have different terms and fees. It’s crucial to budget and figure out which lender will work best for you.
5. Different Ways to Borrow Money Include a Paycheck Advance
There are rare instances that an employer will provide a paycheck advance. Employers are not bound by law to provide this service.
If your employer is gracious to allow an advance, they will deduct payments from your paycheck over the next several weeks. Be sure to show your gratitude if you’re given the opportunity.
6. Title Loans
Earlier, the term collateral was used. Collateral is when you give up something of value in return for a loan. After you’ve repaid the loan, you will receive your collateral.
A title loan is when you give up the ownership title of your car in return for a loan. If you fail to pay the loan back, then the title loan company will own your vehicle.
Get the Funding You Need
Don’t let the current pandemic ruin your financial future. Weigh the pros and cons of the different ways to borrow money.
Using alternative funding to navigate your life will demonstrate financial discipline and savvy. Successfully paying back borrowed money will improve your chances of getting a loan in the future.
If you’re interested in more personal finance articles, then keep scrolling this blog.