We have a very challenging economic situation nowadays and often, there is not enough cash to cover our weekly or monthly expenses. When this happens, our best option is to borrow money. During financial challenges when we need immediate funding, there are places to borrow money. But before borrowing money or taking out loans, study each option to see which ones perfectly fit your current financial situation.
Credit unions are financial institutions similar to a commercial bank. But unlike banks, they are member owned, non-profit cooperatives. They offer loans to members with much lower interest rates and affordable fees. Any profits made by credit unions are returned to members in the form of higher savings rates, lower loan rates, and reduced fees. Credit union policies and decisions are made by the members so you can be sure whatever laws or rules they have are in favor of the welfare of every member.
Friends and Family
Borrowing from family or friends is always a good idea for some since the lender will not require any contract or formality prior to releasing the money. When borrowing money from friends or relatives, credit history and a lot of documentation will not be a major concern. You can borrow money from them without any requirement but only agreement to pay the money on specific date or dates if installment. This option will really work for some who need emergency funds, but it can also be awkward for some and sometimes, trouble and misunderstanding arise if the borrower’s request is rejected.
Online loans are gaining popularity to people who need immediate funding because they can be easily accessed online, all the time. As compared to banks and other traditional financial institutions, online lenders may only require an ID and proof of income. Even borrowers with poor credit history can be qualified, and processing of loan is a lot quicker with cash released in as fast as 24 hours to 2 days. Funds are directly forwarded to the borrower’s bank account which can be withdrawn quickly from a nearby ATM.
Personal Loan from a Bank
Loans from the bank require a lot of documents. Upon application, you need to prove your creditworthiness in the form of a good credit history and score. Borrowing from banks may sound complicated because some also require collateral or a guarantor to make sure there will be someone or something to cover up repayments if ever the borrower is at default. Most banks charge an administrative fee or what they call as origination fee which could cost an additional of 1% to 8%. If you are a loyal client and a good borrower, you may also inquire if you are qualified for a ‘relationship discount.’
Short-Term Loan Options
Short-term loans offer financial options you can trust. The whole process is easier, and the requirements are less stringent. With funds released almost immediately, this type of loan is really a saving grace in times of need. For people living paycheck to paycheck, a payday loan where repayment is done on the next payday, is ideal. If you have a credit card, you may apply for a cash advance from your line of credit if you need quick cash.