If you need money in hurry then your only options are personal loans where you can take loan from your friends or relatives, peer-to-peer lending or credit cards. Each of them have their pros and cons so it’s essential to compare all the available loans before one.
Many lenders now offer prequalification to see which rates and terms you might get.
Personal Loans
Personal loans are a form of financing, a one-off lump sum, provided by a lender and used for most purposes, such as consolidating debts, purchasing a major item or carrying out home improvements.
Personal loan lenders will run a credit check to determine your creditworthiness and your ability to repay past due amounts. They’ll also require information regarding your income and identification. Many lenders allow prequalification with no hard credit inquiry printed on your credit report, so you can compare offers from different lenders before applying.
The rate you’ll pay, and terms for loan repayment, vary by lender. The more you pay in interest, the more expensive the loan. Some lenders also add fees on top of the interest, for example origination charges, late fees or penalties for paying off the loan early. Be sure to consider those factors as well.
Short-Term Loans
It is extremely important to get a clear picture if you would like to borrow a short-term loan. Which type of loan is for you depends on a lot of different factors, for instance, lender, interest rate and repayment term.
Lower interest rates may be available with a bank or credit union personal loan, but eligibility criteria and the approval and funding processes are generally more strict. Loans offered by nonbank lenders (ie, those not affiliated with a traditional bank or credit union) – such as online lenders, members of a lending marketplace, or dirigis (matched by employee networks, speech recognition or proprietary algorithms) – are often easier to qualify for, and funded much more quickly, though at higher interest rates.
Additionally, payday loans and auto title loans could be considered medium-term financing options. This is because this type of loan provides utility to borrowers by providing them with immediate access to cash based on their paychecks or other forms of income. However, these loans tend to be relatively expensive and could even lead to a cycle of debt if consumers regularly use such types of loans. Invoice financing loans for small businesses is also another type of medium-term financial solution that aims to provide cash quickly based on companies’ unpaid invoices that function as collateral.
Peer-to-Peer Lending
A technology, peer-to-peer (‘p2p’) lending allows people who want to borrow money to identify people who have money to invest with an online platform, without using an intermediary financial institution. Loans on these platforms are intended for personal, business or real estate purposes.
Because P2P lenders generally have lower credit requirements and documentation needs than banks or credit unions, and because they can offer repayment terms of one to seven years versus the standard three-year term for credit unions and banks, monthly payments could be slashed dramatically.
Pay attention to a P2P lender’s interest rates and fees including origination or prepayment charges. Make sure you choose the right option for you and your budget. Before choosing an option, compare lenders to be sure of the benefits and details. Make sure it is okay for you – with some P2P lenders, you can only use a loan for investments or to pay for higher education.
Credit Cards
Credit cards are a convenient and easy way of covering expenses like medical bills, home renovations or debt consolidation. However, you should keep in mind that credit card interest rates can be quite high and might go up if you miss payments or pay less than the minimum due in time.
Peer-to-peer lending connects borrowers and lenders, who are individuals or businesses rather than institutions such as a bank or credit union. Unsecured loans (borrowed without collateral) are one type of loan offered this way, but you’ll receive more money if your credit score and loan terms and length are better. There would also be origination fees ranging from 1 to 8 per cent of the total amount you borrow.
Be careful for hidden fees when you want to apply for a personal loan; do your research online before picking the best rate and terms from among various lenders for your financial situation. Compare loan offers online now!