We all borrow money at some point in our lives; it could be to fund a new home, pay for college tuition, or help start a new business. But whenever you are borrowing, remember that there are different borrowing options out there to choose from.
And some have more financial implications than others. Whether looking for a good rate or needing quick cash, it's important to consider your options carefully and assess the risk involved.
Five Fastest Ways to Borrow Money
#1 Personal Loan From an Online Lender
Online lenders allow you to borrow money from the comfort of your home or office. You can apply for a personal loan within a few minutes and receive the funds within the same day or the next business day. These lenders are always available online and have customer service representatives that borrowers can talk to via phone, chat, etc.
It's better to pre-qualify and compare online lenders to get the best APR, depending on your credit score and income level. Again, online lenders do a soft credit check with pre-qualification. This will enable you to shop around without impacting your credit.
Borrowers with low credit scores have more options to get loans from online lenders. Some lenders will still approve your loan request even if your credit score is as low as 560.
- It's easy to apply.
- You can research and compare loan options from the comfort of your computer.
- There are options available for consumers with low credit scores.
- No In-person customer services to handle your complaints.
- There's little or no room for negotiating rates and terms.
- You pay a higher APR on loans if you have a low credit score.
Get a Fast Personal Loan at Low Interest Rate Through CreditYelp
CreditYelp is an online loan broker that helps you secure loans with the good rates and terms to ease your financial difficulties. At all times, we provide you with comprehensive and objective information, professional comparison, and evaluation to help you make a rational financial decision.
CreditYelp can connect you with a suitable lender, regardless of your current financial situation and credit score.
By joining CreditYelp, you can borrow money easily, irrespective of your credit history.
Get a Personal Loan Now!
If your credit falls into the bad credit range, most lenders and banks will likely see you as a credit risk. This is where CreditYelp comes to the rescue.
Steps to Get Fast Personal Loans Through CreditYelp
- Fill Out a Form: Fill out a form on the CreditYelp site. Once you complete the form, we will send your loan request to several lenders on our network.
- Accept Offers: After that, you will receive customized offers from different lenders. We will help you carry out a professional comparison and evaluation of the offers to help you make the right choice.
- Receive Money: Once you accept a loan offer, you will receive the funds as soon as the next business day.
How does CreditYelp compare
Why You Should Get a Personal Loan Through CreditYelp
- CreditYelp is friendly to the borrowers with bad credit and low income.
- CreditYelp works with over 10 reliable and legit partner lenders with NMLS licenses.
- Fast connection with several lenders. Over 10+ lenders will see your loan request.
- You can enjoy the loan with a higher limit, better rates and terms.
- There are no hidden fees.
- You get the fund as soon as the next business day.
#2 Cash Advance From a Credit Card
Cash advance from a credit card means using your credit card to buy "cash" rather than goods or services. It's a fast and easy way to borrow money. But most times, the limit isn't more than a few hundred dollars.
If your credit card has a pin, you can visit any ATM to withdraw cash. But for credit cards without a pin, you need to take your card and ID to any bank offering cash advance through your card payment networks such as Mastercard or Visa.
Even though this option is fast and easy, people generally avoid it because it's costly. The interest rate is over 20% annually.
- No application fees.
- It won't attract interest if you can pay off your advances every month.
- It gives you immediate access to funds.
- If you already have the card, you won’t go through any application or approval process.
- The interest rate is extremely high if the balance compounds.
- It may affect your credit score if you borrow too much.
#3 Loan Apps
Loan apps allow you to borrow a portion of your expected earnings to be repaid on your next payday. However, you may pay an extra fee for expedited services.
Cash advance apps with low fees are a great borrowing option when you need fast extra cash. You can use loan apps without harming your finances or credit scores. However, they can lead to a cycle of debt if you aren't disciplined.
- No credit check. Loan apps don't run a credit check to determine your creditworthiness.
- It's relatively inexpensive. Some loan apps don't charge interest or fees on Advance. But if you need to receive the money faster, you will need to pay an express fee.
- It's easy to use.
- The repayment time is short.
- It's a temporary solution.
- Sometimes, express fees can translate to higher APR.
#4 Pawnshop Loan
A Pawnshop loan is a secured loan that requires you to provide valuable items like Jewelry, antiques, electronics, etc., as collateral.
Before you borrow money from a pawnshop, the broker assesses the value of your collateral, its conditions, and its resale potential before making you a loan offer.
Once you accept the offer, you walk away with the cash and pawn ticket. And if you repay the loan within the agreed time (usually 30 days), you can re-collect your items. Otherwise, you forfeit it to the pawnshop.
In addition to interest rate charges on loans, pawnshops charge fees for storing, appraising, and paying insurance of your collateral. This makes pawnshop loans expensive and could result in an APR as high as 200%.
- It doesn't have an application or approval process.
- Once you have collateral, you have immediate access to funds.
- You can potentially lose a valuable item if you fail to repay the loan.
- It's costly.
#5 Loans From Family and Friends
If you are in a critical financial situation, you can borrow money from someone in your circle. You don't need to go through any formal application and approval process.
Taking loans from family and friends is perfect for people who urgently need cash and whose current credit scores can't qualify them for a loan.
However, don't throw caution to the wind when borrowing money from someone in your circle. When not appropriately handled, loans between friends and family could lead to conflict.
So, try to pay at the agreed time and inform the lender (your family member or friend) ahead of time if you can't meet up. And ensure that you document and notarize the mutually agreed-upon terms of the loan.
- No formal application and approval process.
- Low or no interest rates.
- When not handled properly, it could affect your relationship with your friend or family members.
Five Cheapest Ways to Borrow Money
#1 0% APR Credit Card
If you have a good or excellent credit score, a 0% APR credit card is one of the most affordable ways to borrow. All you have to do is to get a credit card that offers an introductory 0% APR. Depending on the card issuer, this interest-free introductory period ranges from 6 to 21 months.
Within this period, you can use the credit card to pay for medical bills, car repairs, or any other purchases without paying any interest.
However, only use this option if you can pay off the credit card balance within the introductory offer period. Otherwise, you will pay high-interest rates on the credit card balance when the introductory period elapses.
And in most cases, you need a good or excellent credit score to enjoy a 0% APR credit card.
- You can potentially save on interest if you are prompt with your monthly payment.
- It can improve your credit score.
- You forfeit your introductory period offer when you miss payments.
- The introductory APR period only lasts for a while.
- If you are unable to pay the credit card balance before the 0% APR period elapses, you will pay high interest rates.
#2 Personal Loan from a Bank or Credit Union
Banks and credit unions are financial institutions that offer personal loans. The major difference between these two institutions is that banks are for-profit, while credit unions are not-for-profit.
Banks and credit unions usually offer loans to borrowers with good credit scores (670 or higher).
Bank, for instance, is a traditional source of loans for borrowers who want to fund a new home or college tuition.
There are different ways you can borrow money from banks, including through mortgage products, personal loans, auto loans, construction loans, etc. Banks offer additional APR discounts to their customers and allow flexible payment conditions to ease their financial situation.
A credit union on the other hand is a cooperative institution established and controlled by members of a particular community, organization, or group. They offer similar services as banks but sometimes limit these services to members.
Loans from credit unions have more favorable rates and generous terms than banks and other financial institutions.
- Compared to other types of personal loan lenders, banks and credit unions have lower APR rates.
- Current customers enjoy discounts on APR.
- Flexible payments to ease borrowers' financial difficulties.
- The application process is straightforward.
- You must be a member to apply for a credit union loan.
- Getting a loan from banks is difficult if you don't have a good or excellent credit score.
- Prequalification may not be available.
#3 Buy Now, Pay Later
Buy now, pay later is a cheap way to borrow money to sort out necessary expenses. It allows you to buy items now and make installment payments later. Several retailers offer this payment option to their customers in-store or during the online checkout process.
Two popular companies that offer buy now, pay later are Afterpay and Affirm.
While Afterpay is interest free and only charges a late payment fee. Affirm charges interest depending on the purchase amount and retailer.
But you will need to make a small down payment (usually 25% of the total purchase) on the item and pay the rest over a series of installments.
- It doesn't attract interest if you pay off your purchase in four installments.
- It doesn't have hidden charges or late fees.
- If you make your payment on time, it won't impact your credit score.
- You can only use "buy now, pay later" with retail stores that partner with the companies.
- Some payment plans have interest rates as high as 15%.
#4 Personal Line of Credit
A personal line of credit is like a blend between a loan and a credit card. It's an unsecured line of credit that banks and credit unions offer to people with checking accounts.
The interest rate on personal lines of credit is relatively low. However, lenders will need to approve your loan request based on your credit profile, income, and other debts.
Once approved, you can only draw what you need and pay interest on the amount you use.
Therefore, this is a great loan option if you are unsure how much you need to borrow.
- You only draw money based on your needs and pay interest only on the amount you use.
- You can continuously reuse the line of credit as you pay the previous balance.
- It doesn't affect your credit score.
- Getting a personal line of credit requires a good or excellent credit score.
- Sometimes, lenders charge additional fees alongside interest.
#5 401(k) Loan
A 401(k) loan allows you to borrow money from your retirement savings account. It's like borrowing money from yourself. The good thing about 401(k) is that you don't have to pay taxes or penalties on loans.
The 401(k) loan has a low-interest rate, and the interest payment goes back to your retirement savings account.
And since defaulted 401(k) loans aren't reported to the credit bureaus, a missed payment won't affect your credit score.
- It allows you to borrow money from yourself instead of a third party.
- The interest rate is relatively low.
- Paid interest goes back to your retirement savings account.
- Missed payments don't impact your credit score.
- Reducing the growth potential of your retirement savings account.
- Depending on the plan terms you may have to repay your loan quickly if you are unemployed.
Think Twice About These Borrowing Options
#1 Payday Loans
A Payday loan is a small short-term loan that you are expected to repay with your next paycheck. It’s a short-term loan that promises instant funds and charges high interest rate.
Even though you can obtain funds instantly through payday loans, you should only consider it as a last resort.
It's extraordinarily costly, and you can pay as high as $15 for every $100 borrowed. This will amount to an APR of over 360% for just two weeks.
Research revealed that most borrowers that use payday loans pay more in fees than they originally received in credit. And this will create a cycle of endless debt.
#2 High-Interest Installment Loans
High-interest installment loans promise fast funding and easy application but come with high-interest rates. Interest rates on these loans are above 36% and are expected to be repaid within a few weeks or months.
For instance, a high-interest installment loan of $1000 with a six-month term and a 60% APR would cost a borrower $182 in interest. And it would require you to pay $197 monthly.
Don’t take out high-interest installment loans unless you have exhausted all other options. They come with high fees and high-interest rates and could severely hurt your credit score if you repeatedly miss or make late payments.
Other optional Borrowing Ways
#1 Peer-to-Peer Lending (P2P)
Peer-to-Peer lending is a financing method that allows individuals to lend or borrow money from one another without going through any financial institutions. P2P lending websites connect borrowers to lenders, set the terms and rates, and approve the transactions.
These lenders are investors who want better returns on their cash savings than they would get a bank saving account or certified deposits.
In a peer lending market, borrowers can receive a total or portion of the loan. And the loan may be funded by a single or multiple lenders or investors.
- You may be able to get a P2P loan even if you aren't qualified for other credit sources.
- Interest rates may be lower than traditional lenders.
- No in-person customer service.
- You may end up owing money to multiple lenders rather than a single creditor.
- P2P lending sites may have complex fees structure.
#2 Margin Accounts
A margin account is a brokerage account that allows a brokerage customer to borrow money to invest in securities. The collateral for this type of loan is the funds or equity in the brokerage account.
However, when there is a rise in the stock bought, the borrower gains, and any fall is a loss.
It's easy to initiate this loan when you already maintain a margin account with enough equity. And the interest rates are lower than other sources of funding.
- The interest rates are lower compared to other borrowing options.
- Compared to other types of loans, you don't have to pay additional fees.
- You can pay your debt by either selling securities or paying back in cash.
- Interest rates may change.
- Your debt can potentially increase if the value of the securities drops.
- Borrowers may need to provide additional collateral if the price of securities plummets.
#3 Public Agencies
Public agencies like (Government and non-profit organizations) give out different kinds of loans to help citizens. The loans could be for homeownership, rent assistance, gardening, starting a business, etc.
It's easy to contact your local government or check out for National government agencies to find out the available loans based on your needs.
Generally, loans from public agencies have better terms. Some may even have as low as 0% interest rates. But these loans come with much more specific requirements.
If you are patient enough to go through the necessary paperwork, a government loan is one of the best ways to borrow.
- They have low or no interest rates.
- Public agencies may not check your credit history.
- These loans may have specific income requirements.
- The application process requires more details.
#4 Home Equity Loan and Home Equity Line of Credit
Home Equity loans and Home Equity Line of Credit (HELOC) are financing options that your home equity secures. Your home equity is the difference between your home worth and what you owe on the mortgage.
Since this financing method is secured, the interest rates are relatively lower than other options.
Home equity loans have an average fixed interest rate of 5%, and Home Equity Line of Credit (HELOC) has variable interest rates starting from 5.25%.
Home Equity loans disburse funds to borrowers as a lump sum. And they will start paying interest on the total amount immediately. HELOC, on the other hand, the lender approves a limit that borrowers can withdraw on an as-needed basis. That is, borrowers only pay interest on what they use.
- Interest rates are lower than other financing options.
- You pay interest compounded only on the amount you use, not the total equity available in your credit line.
- Tapping all the equity in your home can work against you if properties value decline in your area.
- Without discipline, you might overspend.
Consideration Before Borrowing Money
Here are some of the factors to consider before borrowing money.
- Avoid paying more by studying each lender's interest rate before applying for a loan.
- Pay attention to the loan repayment terms, the loan repayment period, and other repayment rules.
- Sometimes, lenders charge fees in addition to the interest rate. It could be origination fees, late fees, application fees, etc.
- Check if the loan is secured or unsecured. Suppose you use your home as collateral to secure a loan. In that case, it can be forfeited to the lender or face foreclosure if you default on payment.
1. How to Borrow Money As Cheaply As Possible?
Improve Your Credit Score to Qualify for low-interest loans.
Interest rates make loans more expensive because the higher the interest rates, the more costly a loan will become. The interest rate range you receive from lenders depends on your creditworthiness which is determined by your credit score.
You will get the best-interest loans if you can improve your credit score to a good or excellent range. And you can borrow money as cheaply as possible.
Sign up for Autopay
Autopay is an automated process that pays your loan balance in full each billing cycle two days before the due date. It helps you to avoid falling behind on loan payments. And some lenders offer borrowers a discount for using autopay.
Avoid late or missed payments.
Most times, lenders charge a fee for late or missing payments. This would make the loan more expensive, and late payments could lower your credit score, making future loans more expensive.
Pay Off Your Credit Card Bill in Full Every Month
Suppose you only pay part of your credit card balance by the end of your billing cycle. In that case, you will be charged additional interest on the original amount every day you delay. And this will make it more expensive to carry your credit card balance.
2. How to Borrow Money With Bad Credit?
Honestly, it's pretty challenging to borrow money with bad credit , but that doesn't mean it is impossible.
Lenders consider borrowers with bad scores as credit risks. They face unfavorable lending factors like high-interest rates and lower loan amounts. Sometimes, they may not qualify for loans at all.
So, if you need to get a personal loan with bad credit, contact CreditYelp. CreditYelp is an online loan broker that helps borrowers get the perfect loan based on their financial situation.
There are different ways to borrow money online these days. You can take out personal loans from online lenders, pawnshops, public agencies, credit unions, etc. But whenever you are about to borrow money, always remember that all that glitters is not gold.
Be careful with the promise of sending you the funds immediately and consider the interest rate and other fees. Otherwise, you may be stuck in a cycle of debt.
Lastly, working with a loan broker like CreditYelp will help you select the ideal loan option through professional comparison and evaluation.
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