Borrower’s Guide to Obtaining Cash: Pocket Friendly

When an unexpected problem arises, you may need to borrow cash quickly.  But what is the best way to go about getting a quick loan? This guide explains your options, giving you the knowledge you need to make the better decisions for your situation.

Banks and Credit Unions

Sometimes people just assume that they wouldn’t qualify for a loan from a bank or a credit union, so they don’t even apply. It’s worth getting a free copy of your credit report to see if your borrowing power may be greater than you think. If you do qualify for a bank or credit union loan, the rates will be substantially lower than what you would pay for a payday loan or most loans from online lenders.

Credit Cards

Borrowing against a credit card is not an ideal option, but the rates could be lower than payday loans. When you compare the interest rates of credit cards and various types of personal loans, keep in mind that the credit card rate is stated as an annual rate, while the payday loan rate is often stated as a monthly rate.

For example, if you take a payday loan of $100 for a month, and the interest charged for the loan is $15, then the interest rate is 15 percent per month. You’d have to multiply that by 12 to get the annual rate – which comes out to a whopping 180 percent.  Credit card interest rates, while still high, will be much lower than that.

If you open a new credit card account, you may be able to take advantage of introductory rates – as long as you pay off the loan completely before the introductory period ends.

Employer Loans

Some employers are willing to give their workers interest-free advances on their paychecks. This is probably something you wouldn’t want to do often, but in a pinch, it can be a good option that will save you the money in interest and fees that you would have to pay to get a loan elsewhere.

Community Organizations

Organizations such as community centers and places of worship may offer loans or other assistance when people are facing emergencies, need help paying rent or are unable to pay for basic necessities such as rent, food, and utilities.

Retirement Accounts or Life Insurance

If you have a retirement account or life insurance, in some cases you may be able to take out a loan against the account or insurance.

Online Payday and Personal Loans

Payday loans are quick cash loans of relatively small amounts of money. These loans have a high interest rate.  The loans get their name because borrowers are supposed to repay the loans on their next payday.

These short term loan lenders are for an emergency or unexpected expense and only if absolutely needed a payday loan may be a reasonable option. Problems start, however, if you can’t pay back the loan on your next payday and end up renewing the loan or taking out a new loan right after paying off the old one.  Many people fall into this trap, especially if they took out the loan in the first place for ongoing expenses, rather than for an emergency.

Fees and interest pile up at an alarming rate. After a few months, the total amount you have to pay back may be more than twice as much as you borrowed in the first place.

Business Loans

If you own a small business, you may be eligible for business loans. These would be larger loans than you would get through a business loan lender – generally $1,000 and up. Both short-term and longer-term loans are available. Options include SBA loans, business lines of credit, startup loans, equipment financing, and merchant cash advances.  Business Loan finder tools can walk you through your options to find a business loan lender who may be able to help you  for the current needs of your business.

Here’s a list of the top 20 personal finance sites that give you insight into was to research alternative financing options if you want a smaller loan with more flexible options or if you don’t qualify for some other types of traditional loans.

Sorting through your options may seem overwhelming, but you can usually get help finding loan options that meet your needs and your qualifications.  It can be done online, safely and conveniently. If you find cash loans online that works for you, often you can get the money you need as soon as tomorrow.