There are a lot of reasons why people borrow money – there are good and bad reasons.
If you want to buy an expensive item like a house or a car and you don’t have enough savings to buy in cash and in full, it is a good idea to borrow money. Very few people can save enough money for large purchases and even entrepreneurs with a lot of money in their bank account, borrow money or take out a loan from reputable banks and other financial institutions. The loan is being paid back through monthly instalments which can last for several years. When the loan is paid off, that’s the only time you can call the thing that you purchased your OWN.
When does it become a bad idea to borrow money? If you are going to buy something that is not a necessity, or you only want to splurge or flex – getting a loan in any form doesn’t make any sense. If you want to buy your favorite shoes or a bag, you can always save up every payday until you have enough money for it.
Sometimes emergencies happen, a house that needs repair, a car that breaks down, and other health-related situations that need immediate attention. When these happen, your only option might be to borrow money to fix the problem. This is another reason for borrowing money but remember that you should always plan for emergencies. Always be pro-active.
There are several available options around if you need money to fund your needs and each has its own advantages and disadvantages. Whatever your reason for borrowing money or applying for a loan, it is important to consider various options and look for the best one that will provide you with the best solution.
Banks
Banks offer personal loan packages that seem to be a good option for borrowers. Look for a personal loan that has no origination fee. Some banks have origination fee which is an administrative fee that could run from 1% to 8%.
If you are an existing client, ask if you may qualify for an interest rate discount which is also known as ‘relationship discount’. But unfortunately, some big banks do not offer personal loans while some will require a borrower to have an excellent credit standing to have an approval.
Credit Unions
If you are qualified for membership, then getting a personal loan from credit unions is a better option than getting it from a bank. Credit unions offer loans with lower interest rates and fees than most banks.
Online Lending
In need of quick cash due to an immediate financial need? The best option is to look for reputable online lenders. Most online lenders operate 24/7 online and with no physical office, cost for interest is quite reasonable. Lenders can easily release funds and deposit the amount directly into your bank account as fast as 24 hours up to 2 days.
Short-Term Loan Solutions
For your immediate need for funds, perhaps short-terms loans can help. One option for a short-term loan is a cash advance. There are cash advance loaners that offer better terms compared with payday loans. Processing is quick with minimal requirements.