Are you about to make a big purchase sometime soon? Maybe a new car, house, or plane ticket that you may need the extra funds for? Whatever it may be, it might be a good time to borrow money for these hefty expenses. Read on to learn about where you can get a loan and find out about some of the best ways that you can borrow money.
Where Can You Borrow Money From?
Before you get started, you need to know where to look. Here are some places or people that you could visit when you’re looking to borrow money:
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Banks – When looking for a loan or line of credit, traditional banks are probably one of the first lending institutions that come to mind. This is a good option for those who have a good credit standing and are looking for other flexible options. Other products that banks typically offer include mortgages, personal loans, credit cards, and retirement accounts.
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Credit Unions – These are member-owned financial institutions dedicated to providing competitive rates to their communities. Credit Unions may have more flexible lending standards because of their values and structure that are grounded on community. This makes it easier for you to borrow money even if you don’t have a strong credit standing.
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Online Lenders – Online lenders are starting to gain popularity because of how quick and easily accessible their money-lending process is. All you need to do is simply apply for a loan online. Afterward, there will be a representative available to guide you and answer any questions you may have during the money-lending process.
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Peers – If you’re new to borrowing money, you might be more comfortable getting it from your friends or family instead of a lending institution.
This is an ideal option for those who need money ASAP and is worried about whether their current credit score is substantial enough. Borrowing money your peers also helps you avoid the long application and approval process that some lenders have. You can simply have a conversation with someone you trust to go about the terms and conditions of your money borrowing.
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401(k) Loans – A 401(k) is for employees aged 59 and older. This is where they can borrow a loan from their retirement savings account. There are different rules for 401(k) loans depending on the retirement plan. Though, you’ll typically need to pay this back within the next 5 years after borrowing the money.
Some advantages of a 401(k) loan include paid interest going back into your bank account. In addition, you also won’t need to pay a withdrawal penalty for taking a loan out of your account.
How Can You Borrow Money?
Now that you know where to look, read on to find out about how you can actually borrow money.
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Personal Loans – You can get personal loans from banks, credit unions, online lenders, and from your peers. This is a flexible option because it can be used for a wide range of purposes, such as home improvement and travel expenses.
Some lenders allow you to prequalify for a personal loan before you apply for this. Doing so allows you to see the possible interest rates you would receive based on your credit standing. Prequalifying is a convenient way to shop around and compare different lenders with one another to identify the most suitable option for you.
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0% APR Credit Card – Using a credit card is another common way in which people borrow money. People love to use this because the provider only charges interest on the outstanding balance each month instead of the total credit limit. But credit card annual percentage rates (APRs) are typically higher compared to other borrowing options.
Although, if you’re leaning toward using a credit card, choose one with a 0% introductory rate. This, along with paying off your balance every month, helps you avoid accumulating interest.
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Buy Now, Pay Later – “Buy now, pay later” plans allow you to purchase items now and pay for them over time, typically without interest or fees. Many retailers provide these payment plans during the online checkout process and occasionally in-store.
Get Yourself a Loan Today
After learning about where to look and how to borrow money, you can now visit the lending institution of your choice to get a loan. Make sure to thoroughly research your options before sticking to a lender. After finding one that you trust, ensure that you make a solid plan or timeline on when and how you can pay the loan back. This will help you to create a good track history as a money borrower.
Amenorhu Kwaku
Amenorhu kwaku is an author, internet marketer and entrepreneur. He is the founder of SuccessValley, a network community for students and aspiring entrepreneurs
