How Can I Borrow Money? Here’s Twelve Ways to Get Funds in Your Wallet Quickly
Almost all of us have been caught in a situation where we’ve suddenly needed to borrow money when we just don’t have enough, and the panic you can feel in that moment is never pleasant. You feel like a rabbit caught in headlights with nowhere to turn, and that’s when the panic sets in, the anxiety takes over, and all sorts of negative images come into your head about what could happen if you don’t get money. The possible causes are infinitive, ranging from unexpected medical bills, a car accident, someone robbing you, the list goes on.
If that sounds like you right now, then, firstly, stop and take some deep breaths; you’re going to be OK, there’s almost always a way out. All you need is some creative thinking. If you’re stuck for cash and need a personal loan to get you out of your temporary misfortune, there are plenty of options available for almost anyone.
People from all walks of life can find themselves in a place where they need to borrow money immediately. That’s why we asked some financial experts about the places to go to get money quickly. So take a deep breath, relax, and let us help you resolve your financial difficulty.
Where Can I Borrow Money?
When we think about needing to borrow money, most of us think of securing a personal loan, an agreement where you agree to borrow money for a predetermined period of time at a rate of interest. These loans can be used for almost any purpose, ranging from a mortgage agreement to student tuition payments and anything in between.
Personal loans are provided by a wide range of financial institutions. Some of these inclue banks, building societies, credit associations etc., the list goes on.
Before you agree to take out a personal loan, you need to make sure that you fully understand the terms and conditions of the agreement, especially the total amount that you need to pay back at a later date. That’s because, due to interest, the final amount owed will be higher than the amount you originally borrowed.
If you’re stuck for cash and need to borrow money fast, a loan will be able to help you out, but failing to service the loan you agree to will cause you even more financial troubles down the line. We also caution you against taking out a loan to pay off another loan; debt consolidation can be useful in some circumstances, but taking out a loan to pay off another loan can be risky.
How to Borrow Money Fast
With all that being said, we’ve talked to experts on personal loans about ways you can safely borrow money fast, to make sure you avoid making poor financial decisions. Loan sharks are a real problem in our communities, and the promise of quick money can lead people to make bad decisions that expose them to more than just financial risk. Not all of the options we’ve provided will be right for everyone either, so make sure you read the list in full to find out which way to borrow money fast works best for you.
Twelve Ways to Borrow Money Fast
- Personal Bank Loan
The first place you can start is at a traditional bank by applying for a personal bank loan. While most loans offered by these institutions will be designed for things like mortgages and vehicle loans, some banks also offer shorter-term loans as well. You may even be able to apply via your banking app.
If you’re able to access a personal loan from your bank as an existing customer, you are more likely to enjoy preferential rates. However, in order to access a bank personal loan as a quick way to borrow money, you may need a high credit score in order to qualify.
- Agree to a Community Loan
Personal loans aren’t just offered by financial institutions; many community organisations exist that can help people looking for ways to borrow money fast. In fact, some of these groups may even be willing to provide hardship grants, which means you may not need to pay back the money at all.
Community organisations that provide personal loans and/or grants come in a myriad variety, including cooperative societies, religious groups, or clubs linked to local authorities. If you are stuck for money and need cash, try to contact a similar group in your area and you may find a way to borrow money at a low rate.
- Take Out a Credit Union Personal Loan
Another banking institution that could offer you a personal loan is a credit union. This is a member-owned corporate entity, also known in some parts of the world as a cooperative institution. This means that you won’t be borrowing from a corporation but rather from a collective group of individuals.
Credit unions typically don’t operate on a profit basis, which means that any personal loans you take out with such institutions are likely to come with lower interest and sign-up rates. However, it is significantly more difficult to access these loans if you’re not a member of the credit union in question, so consider joining one as a long-term investment in financial stability.
- Sign Up for a 0% Interest Credit Card
It’s not a good idea for you to borrow money quickly by signing up with a credit card in most cases, as they usually come with high interest rates, but in some limited cases, there’s a way around that. By getting a credit card with an introductory interest rate of 0%, you’ll be able to borrow money at no additional cost.
Before you think, ‘I’ve found a place to borrow money that’s perfect,’ it’s important to remember that this rate will have a number of catches. The 0% interest rate won’t last forever; it will only apply to some things like payments, and you’ll lose the preferential rate if you miss payments. You will probably also need a good credit score.
- Get an Alternative Payday Loan
Some credit unions and other financial institutions linked to local communities also offer short-term alternative payday loans. These quick-notice personal loans are designed for people in real emergencies who are short on cash to pay for essential services and bills. Without an alternative payday loan, they may be left destitute.
In the United States, federally chartered credit unions are only permitted to charge alternative payday loans at a maximum annual percentage rate of 28%. This is still a high figure, but it’s lower than payday loans, so it might be a good option if you’re in an emergency. Just make sure you’re dealing with a reputable organisation.
- Payday Loans
The more conventional form of the payday loan is very controversial, as lenders have been known to charge exorbitant rates of interest for these personal loans, often to people with limited financial literacy. In many cases, interest rates of 360%–400% APR are not unusual, representing a runious cost for many who sign up for them.
Some states have even enacted legislation regarding payday loans, so check local laws where you live before signing up for one. We’re including them on this list to ensure it’s as complete as possible, but we caution against using them unless absolutely necessary. The one silver lining to payday loans is that people with bad credit histories can usually access them.
- Peer to Peer Lenders
Peer-to-peer lenders represent an old format of personal loans given a modern format, as this involves connecting people needing to borrow money with individual lenders or investors who are willing to provide it. By using peer-to-peer platforms to borrow money, you’ll be able to bypass traditional institutions.
This means that you will be more likely to find someone who’s willing to lend you money or find a personal loan agreement that is more tailored to your specific financial needs. These loans usually have a simple application procedure and are open to people with low credit scores as well. The main downside is that there can be high origination fees charged on your loan.
- Loan Against Property
Putting up the property you owe as collateral for an emergency personal loan is a big step with clear dangers if you fail to properly service the loan, but it’s a useful stop-gap measure if you don’t have many options. As part of this loan, you agree to provide some or all of the value of the property you own should you be unable to make repayments.
The downsides of this type of personal loan are obvious; you could end up losing your home or other valuable property. Banks won’t typically loan you the full amount of your property either, usually up to 60–70%. However, if you are stuck, this loan can represent a way out and usually comes with low interest rates as standard.
- Borrow From Your 401k Plan
Most organisations provide 401(k) plans, which are retirement plans that let workers contribute a portion of their income towards the plan. These retirement plans offer substantial tax savings in addition to assisting employees with investing and saving for the future, and the good news is that you can borrow money from then as a sort of personal, personal loan.
You can borrow money from their retirement savings plan by applying for a 401(k) loan, but you have to check with your employer first to ascertain whether your company’s loan policy allows this. If it does, you can start borrowing, and you can even pay interest back to yourself, but you might have to pay the full amount in your 401k back if you lose your job in the meantime.
- Personal Line of Credit
A personal line of credit is similar to conventional credit cards but it instead represents an older form of borrowing where you’re given a maximum amount you can borrow, ie, your credit line. As long as you pay off what you owe, you can continue to access the lien of credit. However, unlike credit cards, there will be an ultimate expiration date on your credit line.
The advantage of using a personal line of credit is that you only need to borrow money as and when needed, and while interest rates are variable, they do tend to be on the lower side. However, you won’t be able to enjoy any of the extra benefits that many credit cards offer, and financial institutions may not offer this form of borrowing.
- Get a Margin Account
A margin account is a special type of bank account that enables customers to borrow funds to purchase assets or stocks, and it reflects a common transaction in everyday society. Someone looking to make money on a quick deal may ask a friend to front them a specific amount of cash to purchase an item, which they will then sell on for a profit, returning the original investment plus interest in the process.
A margin account fulfils the same purpose but at a higher level, and it is most commonly used by people with experience in investing. Unlike the personal loans on our list, you can actually make significant gains if the value of your margin account goes up. However, if the value of your stock falls, you will, of course, lose a significantly larger sum of money.
- Credit Card Cash Advance
Most credit cards will allow you to withdraw cash from an ATM machine for a fee, and if you’re in a pinch, this is frequently one of the quickest ways to secure a personal loan, of sorts. All you need to do is enter your PIN and select the amount you want to borrow, which is usually capped at a few thousand. Once you’ve done that, you’ll receive your cash.
The problem is that, while this is indeed a quick way to borrow money, most credit card providers charge significantly higher rates of interest for cash advances. If you continue to do this after one or two transactions, you risk running up serious high interest payments, not to mention the fact that your credit score could be negatively affected. As such, you should only do this in a real emergency.
Avoid Needing to Borrow Money – Sign Up With PocketGuard
Doctors often say that the best cure is prevention and when it comes to finances the same adage holds true. The best way to avoid the financial problems that can arise when you borrow money is to ensure that you do not have to borrow in the first place. Shocks can always happen; sometimes you may need to borrow money, but in most instances, you can avoid these problems by controlling your day-to-day finances with PocketGuard.
Our budgeting app is designed to make it simple for you to control all your spending, allowing you to monitor your bills, expenses, etc. to mitigate the risk of experiencing a cash shortfall. Our system allows you to set custom budgets and spending categories that will help you keep money aside for rainy-day emergencies. Get in touch with us today, and we’ll help you get started on your journey to financial stability.
