No one likes to go into debt, but sometimes life forces us into a corner. Whether it’s a serious emergency, a sudden crash, or unforeseen complications, you find yourself out of cash with nowhere else to go. In these difficult times, it’s wise to know your options before taking just any loan that comes your way. Here are all your options when it comes to getting a quick loan, broken down into why and when you should (or shouldn’t) turn to it.
1. Personal Loans
Personal loans are perhaps the best option you’ll have to have access to quick yet safe cash. This holds especially true if you’re seeking your bank or credit union for a personal loan, as the debt structure can be more lenient, and the interest rate can be low. The better your credit score, the better the deal you can have with most personal loans. While you may be able to get an unsecured personal loan (one without collateral), some institutes may require some sort of collateral as a form or assurance against defaulting.
2. Cash Advance and Payday Loans
Sometimes, personal loans may not give you what you’re looking for. For instance, they may have a minimum limit on the amount you want to borrow. So what can you do if you want to get a loan for a small amount of money? In this case, you may want to look into cash advance or payday loans instead. You can have access to this loan by looking up trusted lenders or seek the professional guidance of a payday loan matching service such as GreenStarCash to connect you with the lenders. Professional matching services make the process so much easier; all you’ll need to do is fill an online form, and they’ll connect you with one of the multiple payday lenders they have access to.
A cash advance or a payday loan can give you up to $1000, making it a practical way to get access to a quick and small amount of cash. However, make sure to read the loan terms well and to double-check the due payment date. While these loans are appealing, they usually come with relatively much higher interest rates in case of late payments and defaults.
3. Credit Card Advance
Another way to get a cash advance is through your credit card. A cash advance is the lower limit of the loan you can get through your credit card, but you can also seek a bigger loan through a credit card advance. These loans are usually structured for short-time repayment, and they come with insanely high-interest rates in case of payment delay as well. It’s better to avoid getting this kind of loan unless you’re sure you can stick to the deadline; it’s not smart to get a credit card advance if you’ve just lost your job, for instance.
4. Credit Unions
While you can seek credit unions for personal loans, you may find an even better option for a payday loan alternative (PLA). Most credit unions offer PLA at much lower interest rates – a maximum APR of 28%. That’s an even lower interest rate of many personal loans. On the plus side, these PLAs also offer small loans and aren’t limited to big ones. What’s even better is that they can be structured to be repaid on a longer period, ranging from one to six months. The only restriction is that you must be a member of the credit union offering these payday loan alternatives.
Learn more from Gordon Simmons, banking and finacial expert.
5. Private Online Lenders
Aside from online matching services, you can find online peer-to-peer (or P2P) lenders that offer what is close enough to personal loans. You’ll find all sorts of online lenders, each having their own loan terms and structure. Some of them will stress on high credit scores, while others will have different requirements. Before choosing a P2P lender, make sure you can trust them by checking their reviews and testimonials from other borrowers. Even if you think you can trust them, never sign a contract before double-checking the terms and loan structure and make sure it’s suitable for you.
6. Retirement Account Loan
If all else fails, you may seek your retirement account for a loan that’s low in interest and won’t affect your credit score. Technically speaking, you’ll be borrowing from your own savings, but that shouldn’t make it harmless. You may also face some penalties if you fail to pay back this loan in a designated time frame.
Life can hit hard sometimes. Under stressful circumstances, you may rush into debt without analyzing the full scope of the consequences. Make sure to explore your options and understand the full scope of the loan before you decide to sign the contract.
SEE: Loan Qualifications