Popular Lending Options for Those Looking to Borrow
When you are faced with a financial emergency, the best option is to apply for a short-term loan. The good news is that there are a lot of companies that offer loans to people across the country.
In case you have a bad credit history, you don’t have to worry. There are lenders who specifically deal with people with bad credit. However, you will have to repay the loan with a relatively higher interest rate compared to those with a perfect credit score.
What are some of the popular lending options you can borrow money from? Let’s take a look:
Banks are the most common places that many people run to get loans when they are in a fix. Banks offer different types of loans – depending on the needs of a borrower.
Borrowing a loan from a bank is a bit tedious compared to other financial institutions. For example, most loans will require you to provide a range of documentation such as a credit report, bank statements, and employer’s information among others. This makes it difficult to rely on bank loans if you are in urgent need of money or in case you have bad credit.
- Short-Term Lenders
Another great option for anyone in need of urgent money is lending companies. There are several companies across the country that offer short-term loans for people – although with a higher interest rate.
It’s easy to find trustworthy loan companies in many communities across the country. You should however ensure that you repay the loan on time to avoid being blacklisted. The good thing about most of these companies is that they don’t care about your credit score.
- Peer-to-peer lending (P2P)
Also known as social lending or crowdlending, peer-to-peer is a system where a group of individuals is allowed to borrow and lend money without the need for a financial institution – as an intermediary. Although peer-to-peer lending eliminates the middlemen, it still involves a lot of risks and effort to get the money.
In peer-to-peer lending, borrowers get money from individual investors who give the money at an agreed interest rate. The borrower and the lender link up via a peer-to-peer platform. A lender is able to see a borrower’s profile and decide whether to lend them or not.
- Credit unions
A credit union is a cooperative comprised of several members – who control the institution. In most cases, credit unions consist of members of a specific group or organization.
Credit unions operate similarly to banks. The only difference is that they are nonprofit institutions. Their main objective is to improve the life of its members by providing short-term loans at lower or no interest rates. The best way to benefit from credit unions is to become a member.
- Credit cards
If you are responsible, then credit cards can be a good source of loans. However, if you lack financial discipline, then it’s better to stay away. Credit cards are good for people who want small short-term loans.
For instance, if you are faced with a financial emergency, you can use your credit card (cash advance) to access the funds you want almost immediately. In case you have a credit card already, you won’t incur extra charges in terms of application fees