Do you need quick cash to cover an unforeseen expense?
You are not the only one – almost 1 in 3 American workers short of cash before payday, even those who earn big salaries.
Fortunately, there are many quick loan options that you can take advantage of. They all have advantages and disadvantages, so it is important to weigh them before choosing.
Read on to determine what type of loan is best for your situation and here are 5 reliable loan options.
1. Personal loan
Personal loans are available from banks and other financial providers. The amount you can borrow usually depends on your credit score, with a higher score allowing you to take out a larger loan.
You will have a fixed interest rate and a fixed repayment period.
If you choose a loan secured by an asset, such as your home, your interest rate will be lower. Unsecured loans have much higher interest rates.
If you have a good credit rating then a secured personal loan is a good option.
2. Payday loan
Do you have a low credit score and can’t take out a personal loan?
Payday loans may be worth considering. They’re secured against your next paycheck, so your credit score doesn’t matter and you’ll have to pay them back as soon as you get paid.
This makes them useful for covering unforeseen bills, as long as you are sure you have the money to pay them off in full on time. If not, you will be hit with massive accusations that could lead to other financial problems.
Payday loans are generally intended for smaller amounts of money, so they are not useful for large expenses.
3. Peer-to-peer loan
Peer-to-peer lending is a relatively new way to borrow money directly from strangers online, without the involvement of a bank or credit card company.
To get a peer-to-peer loan, you’ll need a good credit score and proof of employment. Interest rates vary depending on your situation and the individual lenders.
If you don’t stick to the repayment plan, you could have to pay significant late fees and damage your credit score.
The peer-to-peer loan is worth considering if you have good credit and know you’ll be able to pay it back on time.
4. Car title loan
An auto title loan is a loan secured by a vehicle that you own. If you don’t pay off the loan on time, your car could be repossessed.
This makes car title loans in Detroit a good option if you are confident that you can meet your payments, but a risky option if you are in financial difficulty and rely on your car to get to work.
These loans are great if you need cash quickly, but they come with significant risks.
5. Pawnbroker loan
Another way to use a high value item to secure a short term loan is a pawnshop.
For example, you can use an expensive piece of jewelry to take out a loan, and then “redeem” the pledged item by paying off the loan within a certain time frame.
However, the interest rates can be high and you will lose the item if you don’t pay back the loan.
What if you regularly need quick cash?
Do you need quick cash every month? If you live paycheck to paycheck, it’s worth getting financial advice.
You may need to find a better paying job, move to a cheaper area, or cut your living expenses.
Want to learn more about managing your money? Visit the Finances section of our site today.