Ways to Borrow Money if You Can’t Go to a Bank?
There are times when you need a loan, but low credit scores are standing in your way. It may seem as if you have run out of options. Fortunately, there are ways to borrow money even when your credit isn’t perfect.
According to the finance experts at SoFi, “Applying for personal loans online or at your financial institution will require meeting your lender’s criteria.” If you’re searching for personal loans online, you have plenty of options. Here are three ways to borrow money when you can’t go to a bank.
In this article, you’ll learn more about Installment loans, 401(k) plans, Payday loans, and a few more options. While none of these options is perfect for everyone, they can all help you in times of need. While they may not be as convenient as a traditional bank loan, they can be a good option for some. Here are a few ways to borrow money when you can’t go to a bank.
Personal Credit Cards
Did you know that you can get a cash advance personal credit card? While this may be an expensive option, your credit card can provide you with
immediate cash. On average, expect to pay 16.61% interest on the advance. If you have a card with a low APR, getting an advance will be cheaper.
- Before you get a cash advance on your credit card, consider the following.
- You can get cash using your credit card from an ATM.
- Lenders charge service fees for credit card advances.
- You may be required to pay an ATM fee.
Before you can borrow money from your 401(k) account, you must be eligible to take such a loan. You should contact your 401(k) plan administrator for details and read the summary plan description for any restrictions. Usually, 401(k) loans are not credit-checked, and the application process is quick. Besides, the rates charged are competitive with other forms of lending.
Borrowing against your 401(k) plan may be your only option. Depending on the terms of your 401(k), you may be able to borrow up to 50% of the vested amount with a limit of $50,000. The good news is you won’t have to pay the penalty if you pay the money back in the allotted time.
There are a few benefits of borrowing from your 401(k). Interest rates can be low. When you pay the interest, it goes directly into your account. You won’t have to pay loan applications or origination fees. The downside of borrowing from your 401(k) plan is you are taking out money that is meant to secure your future. If you don’t pay it back, the government will assess a penalty of 10%.
However, before you turn to payday loans, you should look for other sources of cash. Try to reach out to your creditors or the service provider. Request a short-term bill extension, which can sometimes come with a late fee and additional charges. If all else fails, you may want to look into a small loan from a credit union or other small loan company. Compare the rates and terms of different lenders, and remember to check out their ratings with the Better Business Bureau.
Unlike credit cards or lines of credit, installment loans cannot be increased or decreased. To avoid late fees or penalties, know precisely how much money you need before taking out an installment loan. Additionally, interest rates on installment loans mainly depend on your credit score, so checking your credit score before applying for a loan is essential.
Home equity loans
A home equity loan is a great way to borrow money for various purposes, from remodeling a kitchen to paying for college tuition. Because your home secures the loan, you’ll likely get a lower interest rate than you would on a personal loan. Home equity loans can also pay contractors’ bills or college tuition.
Family and Friends
Your friends and family are available to support you. When you need quick cash, it might be a good idea to ask a loved one to lend it to you. Know that personal loans from people you know can lead to conflict. Be prepared for them to ask you some probing questions before they give you the money.
Here are some guidelines to follow when you borrow money from a relative or friend.
- Only borrow an amount that you can afford to repay.
- Let them know when you will pay it back.
- Keep the lines of communication open if you can’t repay the money on time.
- Try not to make borrowing money from friends and loved ones a habit.
- Put the terms of the agreement in writing.
- Get a receipt when you repay the money.
When you can’t go to a bank, peer-to-peer lending may be an option for you. This type of lending has evolved to include more lenders and borrowers. The idea behind this type of lending is to give individuals a return on their money that is higher than that of a personal account. To borrow money through a peer-to-peer lending website, you complete an online application, and lenders evaluate your information. Lenders also consider your credit score when deciding whether to approve you for a loan. As a general rule, a higher score will mean longer loan terms.
Personal lines of credit
There are many benefits to personal lines of credit. Most of these loans are unsecured, which means the bank is taking a great deal of risk. Whether you can pay it back will depend on your credit history and income. Lenders closely examine your credit report. Getting approved for a LOC will be difficult if you don’t have a stellar credit history.
Although you’re less likely to get a loan from a bank if you have bad credit, collateral loans can still help you build your credit. Collateral loans can help you improve your credit because lenders must report late or defaulted payments to the three major credit bureaus. Another advantage of collateral loans is that they typically have lower interest rates, saving you hundreds of dollars over the life of the loan.
Online lending has become a popular way to borrow money if you don’t have access to a traditional bank. Online lenders have become more convenient and easy to use, so you may want to look into them for your next loan. You’ll need to provide personal information such as your Social Security number, address, and job details. You’ll also need to provide information on your expenses and income. This should all take a few minutes of your time.