When you apply for a loan, that creates a hit on your credit history and a mark is left which causes your credit score to go down a little bit. Therefore, it’s important to be careful when applying for loans. It is a good idea to find out exactly what the requirements are with the lender that you thinking of applying with. This way you can avoid wasting an application and getting an unnecessary hit on you credit history if you find out that you will probably not qualify ahead of time. When you know the requirements and you feel that you are likely to meet them, then that’s a good idea to proceed and actually apply.
Let’s look at the popular options for borrowing money. There are obviously many possibilities but the 3 most popular ones are using an online lender, borrowing from family or getting a cash advance through an employer.
Most Popular Options for Taking Out a Personal Loan
Most likely the most affordable borrowing option is to take money from a family member or a friend. This is an informal borrowing option and you’re likely to get the most flexible repayment terms possible. Why? Because they already know and trust you. You can work out a low interest rate but realistically most of the time your family will not even charge you any interest. Therefore you can get the money you need and save money in the long run. This will obviously work only as long as a family member or friend has cash available to give. But if you know that this is the case, this is a great option to explore.
If that is not an option than a lot of people turn to Internet-based lenders. There are many companies that offer web-based personal loans to people. A lot of the time you can even apply directly through their website which makes the process super easy and fast. There will obviously be certain interest rates in place so this is a more expensive option than borrowing from someone that you know. However, the interest rate will usually depend on your credit history and score. Obviously if you have good credit then you can qualify for more money at the lower interest rate. If your credit is bad then you can still find a loan but you will pay more money in interest and sometimes even be charged an origination fee.
Another pretty popular options that people use when looking for a personal loan is a cash advance through an employer. If a person already works for a company then it’s worth the shot to find out if he can borrow money directly through the employer. Many companies have services designed for this and a lot of the time they can provide lower interest rates than traditional lenders. It is often easy to qualify because they already know that you have a steady source of income, since they’re the ones paying you. Your income will serve as a guarantee that the loan will be repaid.