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Everyone in this world needs to borrow money at some point of their lifetime. Either it is for a new home, buying car, or starting a business or for college fees. These days, professional financing options come in a large number with varying setups. Here, you can find some of the most famous lending sources, reviewing their merits and demerits along with it.
Sometimes in life, you might require money for an emergency expense or bill, but you might not know where to start on a frustrating and time consuming process. This page will give you some outline the way you can borrow money faster so you don’t have to spend time worrying about filling the gaps between pay checks.
Since life is full of surprises and many times you’d require borrow money to start business or in order to get along with circumstances. There are times, you might be starting a new job or have to wait for your first pay check, you’d got a flat tire on the way to work, or you need to buy a refrigerator in replace of the broken one. Lots of things might come in your part and things might happen that would seem hard to cover if you are not prepared.
As per the CBS News, 80% of people in US do live pay check to paycheck and about 60% have less than hundred dollars left over at the end of the month. So, if you fall into either of this category, you might need a way to pay for emergency expenses in case they arise suddenly out of nowhere.
Different ways to borrow money
There are lot many financial institutions other than large national banks that might help you somehow. Some of the ways described here goes as:
You might come across terms when a local or regional bank will be willing to extend you the money you need. Here, the credit union is another option and the smaller banks will be little more flexible with plan approvals than the larger ones.
You might have an option to charge whatever you require on your credit card, either by getting a new one or by using one you have already. So, as per your requirement and available credit, you can pay with card or take out a cash advance. Here, the downside is that, there will be fees in addition to bring into higher interest rate and you might not want to risk going over the limits.
Payday lender is another option and they usually render cash advances as per the current pay stubs. Here, the majority or case relies where your credit score might not be considered. But, the terms and fees can be hard to manage. And you’ll have less time to repay the loan along with all the interest and fees.
Credit cards and payday lenders are not the only fast cash option; rather you can also get a signature loan. Signature loan companies may lend you money on your signature alone, without asking for any collateral. Just like payday lenders, the fees here can be higher; however you can get your money even if you don’t have a good credit history.
A personal loan from credit union can be a good option than a personal loan from bank. The reason for this is given here. Firstly, a credit union will offer low fees and interest rate than a bank. Since the credit union is not for profits dedicated to serving member, their goal is to return profit to members rather than the share holders.
There is one drawback here. One must have to meet the credit union’s member ship eligibility criteria so as to be a member. This will include family ties to a current member, connection to an employer or particular schools, and residence in specific counties and more.
#Cash advance from credit card
Using a credit card to access cash seems like an appealing option. As you will have the card, you’d not have to fill the application or check thoroughly the credit to get the necessary for short term loans against the line of credit found on the credit card. In addition, you can usually access the money immediately.
Here, the simplicity of a credit card cash advance can come at any cost. Some card issuer charge fees to get a credit card cash advance with interest rate that is generally higher. Also, many don’t provide a grace time for advance cash, which means that the charge starts the moment you withdraw the cash.
#Family and friends
Now, getting a loan from friends or family members seems like an uncomplicated means to get cash when you’re in need. Since, a family loan will come with no contract, or a basic contract, and you might get a very favorable interest rate void of any credits.
Here, the things might get complicated in case a dispute comes up over the repayment of the loan. In case in future, you still owe to some near and dear ones, that will cause a lot of awkwardness.
Here, another drawback is, since your relative or friend cannot report your loan payment to the major credit bureaus, you won’t reap any credit building benefit.
#401(k) retirement account
Borrowing money from the employer sponsored 401(k) needs no credit check. In case your 401(k) plan allows loan, you can borrow around 50 percent of the vested account balance, whichever is higher even if the cap on 401(k) loan is thousands of dollars.
Here, you need to repay the loan within the give time period and the interest rate you pay on it will go to the 401(k).
Even if accessing cash from 401(k) sounds simple, there are lot many consequences to it. For example: if you leave your job, you might be forced to repay the loan in full prior to your next federal tax return at hand. In case you don’t repay it, you might be hit with tax penalties. In addition, you will be missing out the investment returns on money you pull out of the 401(k).