Investigate Personal Loans Before Obtaining One
Here are a few questions to ask yourself before taking out any kind of loan: Do you really need that loan
, and what is it for? What kind of loan are you getting? How are you paying it back?
What do you need the money for? If you are just wanting to go on a shopping spree, the best option would be to just save the money and wait. It is not wise to take out personal loans for frivolous means.
But when you have urgent expenses that pop up, a personal loan may be the only way for you to climb out of your hardship. There are many people who take on loans without really things hard about the consequences, or understanding the terms of their loan and they they get into financial trouble.
This article will go over several ways of getting an unsecured personal loan. I think that the most common way to get quick cash is through a credit card. But it's just too easy and too convenient to use the plastic.
It's easy to forget that when you whip out your card, you're really entering into a loan agreement with a merchant. That's your cash you're using, plus extra (tag on the interest rate). If you can't trust yourself with credit cards, then it's best to toss them away.
The benefit is that the money is easy to get, but it is also easy to get into a cycle of debt. If you're looking to consolidate debt, you may want to consider using a balance transfer credit card.
If you've got good discipline, using such cards can potentially help you reduce your debt faster. Then there's your trusty bank. If you've got a good relationship with your banker, then it may be worth exploring the possibility of getting some liquidity through them.
Here are a few things to decide upon when you go this route: should you go fixed rate or variable rate? What are the loan fees? Are there ways to lower your interest rate (by offering collateral for instance)?
There's more work involved when you go through your bank, since you'll have paperwork to do and due diligence done on your credit history, income and whatever else, before you're able to secure your loan.
The main benefit of this option is that a relationship with your bank can get you good personal loan rates. However, there are tougher requirements for getting loans with banks and credit unions.
If you've got strong relationships with family and friends, they of course, may be able to help you out financially. But such financial arrangements, in my mind, are fraught with issues: I've seen many relationships go sour because of money, so much so that I caution anyone who's considering lending to family or friends to treat such agreements formally, as you would any business deal or contract.
Do that or just consider the loan a gift, so that if your borrower decides to pay you back, you can be pleasantly surprised and think of it as an unexpected windfall. The main benefit of this option is that you can negotiate any kind of terms with people you know.
But it can be a risk to your relationship if things go badly. What about those lenders that promise you fast cash even if you have bad or no credit?
Places like these will offer you easy, same day loans with no credit checks.
Well of course there's a catch - a huge one! They're the most expensive loans you'll ever come across, with stratospheric rates that can border on usury.
But that's the price you'll pay for convenience and possibly for having problems with your credit standing - it's simply much harder to get access to credit when you're a credit risk.
Watch out for predatory lenders but if you're still bent on getting quick cash, do it with your eyes wide open. The benefits of this options is that you get money quickly and there are no credit checks required.
But the interest rates can be high, especially if you cannot pay your loan back in a couple of weeks.
by: Jack Landry
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