Do you think your bank is the only place you can get a loan? That’s not even the best place to get a loan! Here are 8 places that offer loans.
As of 2017, the total indebtedness of US households is over $13 trillion.
Considering that 44% of Americans don’t have enough money to cover an emergency costing $400, that number comes as no surprise. And with so many lenders out there, it’s hard to know which is the best place to get a loan when you find yourself in need.
Whether you’re in an emergency or you need a loan for a big-ticket item, you first need to know what options are available to you. If you have bad credit or you need cash fast, there are options out there for you, too. Keep reading to find out what those options are.
Things to Consider Before You Borrow Money
Before you look at different loan places, there are other options. Depending on your situation, you may be able to avoid the need for borrowing money.
If you need money to pay a bill, you can find out if you qualify for assistance. Your local utility commision may be able to help you without you having to secure a loan. Religious organizations may also be willing to help.
Another option is to ask your creditor for help. Some creditors, especially credit card companies, will give you payment plan options. It’s always worth asking before trying to find a loan.
Depending on how long you’ve been working at your current company, the company culture, and your relationship with your employer, you might consider asking for an advance on your paycheck. Many employers will understand your situation and do what they can to help you.
If none of the above applies to you, keep the following in mind when searching out your loan provider:
- You don’t have to know fractions to get a loan, but do enough math to know that you’re not borrowing more than you’ll be able to pay back
- Look for a good interest rate with favorable loan terms (note that lower interest rates sometimes come with higher fees)
- When calculating the cost of the loan, include both fees and interest rates
- Know what your credit score is before applying
- Use the debt-utilization ratio (i.e. get what you own to below 40%)
Doing your research is the most important step when looking for a loan. There are a lot of lenders out there. Don’t end up in a situation where you’re unable to pay back your loan because of unfavorable terms or high-interest rates and fees.
The Best Place to Get a Loan: 8 Great Options
There’s no one best place to get a loan – there’s 8. Below we’ve detailed each of your loan options and a bit about what you can expect.
1. National Banks
You can no longer get loans from Bank of America, Capital One, or Chase. However, Citibank and Well Fargo still provide a personal loan to those who qualify.
Big banks have great features like online banking and extensive customer services. In order to qualify, you have to be a customer of the bank. You’ll also need a good credit score and be able to prove that you have a source of regular income.
On the downside, national banks don’t offer a lot in terms of flexibility. They often follow strict guidelines regarding who they can loan to, how much, and what terms they can offer. And if you have bad credit, chances are they won’t lend to you.
2. Private Businesses
Some private retailers and business will provide financing when you make a big purchase. Car dealerships, furniture stores, and other big-box stores are just some of the private businesses you can get a loan from. The catch is that this loan is specifically given to purchase an item that they offer.
3. Credit Unions
There are both federal and state credit unions that offer loans. To qualify, you need to live, work or worship in the area in which they’re located. You’ll need to become a member of the credit union and have a credit history.
Credit unions offer rates that are lower than big banks. Federal credit unions can’t legally charge APRs more than 18% for personal loans and 28% for payday loans. Keep in mind that state credit unions aren’t bound by these rules.
4. Online Lenders
To qualify for online loans, you need a credit score and history as well as proof of your regular income. These loans are easy to apply for and they provide the funds you need quickly.
If you have bad credit, online lenders are more likely to approve you then other lenders. They’ll also allow you to check their rates without causing any changes to your credit score.
The one things to keep in mind when taking money from an online lender is the rates. For people with bad credit, they could end up paying 36% interest.
5. Cash Advance
Getting a cash advance is as easy as taking your credit card to an ATM. If you’re in an emergency, this may be a good option for you. It gives you the money you need right away.
However, the interest rate on a cash advance is usually more than your purchase interest. There’s likely an additional fee charged for taking a cash advance as well.
6. Payday Lenders
To get a payday loan, you need your pay stub. Payday lenders will provide you with a short-term loan in the form of a cash advance for your paycheck. This is another option for people with bad credit.
Payday lenders are usually restricted by the amount they can loan. It’s typically under $1,000 and it’s tied to high fees and interests rates.
7. Parents or Friends
You may be able to secure a loan from a family or friends. If you go this route, make sure that you write the terms down and both parties understand and agree to them. You should also be paying at least some interest.
Remember that not paying back a loan from a family or friend may damage your relationship. That’s why it’s important to have terms documented and to pay some interest for the help.
Peer-to-peer loans are another type of online lender. Private investors pool their money and create a “super fund”. You can apply for a portion of this money.
Peer-to-peer loans provide terms between 3 and 5 years. They’re easier to acquire than a bank loan, and they offer reasonable rates.
More Tips and Advice
When you find yourself in need of money, you need to know the best place to get a loan. Fortunately, there are options out there for people needing large and small amount alike. There are even options for people with both good and bad credit.
Before you take a loan, do your research. Know what the total cost of the loan will be and figure out whether you can realistically pay it back. And for more helpful tips and advice, check out our blog.