Are you needing quick cash to cover an unexpected expense?
You’re not the only one — nearly 1 in 3 American workers run out of money before payday, even those earning large salaries.
Luckily, there are plenty of fast loan options you can take advantage of. They all come with pros and cons, so it’s important to weigh these up before you choose.
Keep reading to work out which type of loan is best for your situation and here are 5 reliable loan options.
1. Personal Loan
Personal loans are available through banks and other financial providers. The amount you can borrow is usually dependent on your credit score, with a higher score allowing you to take out a bigger loan.
You’ll have a fixed interest rate and a fixed repayment period.
If you choose a loan that’s secured against an asset, like your home, then your interest rate will be lower. Unsecured loans have much higher interest rates.
If you’ve got a decent credit score, then a secured personal loan is a good option.
2. Payday Loan
Got 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 need to repay them as soon as you get paid.
This makes them useful for covering unexpected bills, as long as you’re sure you’ll have the money to repay in full on time. If not, you’ll be hit with massive charges which could drive you into further financial trouble.
Payday loans are usually for smaller amounts of cash, so they’re not helpful for big expenses.
3. Peer-to-Peer Lending
Peer-to-peer lending is a relatively new way to borrow cash 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 your employment. Interest rates will vary according to your circumstances and individual lenders.
If you don’t stick to the repayment plan, you could be hit with large late fees, as well as damage to your credit score.
Peer-to-peer lending is worth looking into if you have good credit and know you’ll be able to repay on time.
4. Car Title Loan
A car title loan is a loan that’s secured against a vehicle you own. If you don’t pay the loan back in time then your car could be repossessed.
This makes car title loans in Detroit a good option if you are sure you’ll be able to meet your payments, but a risky one if you are in financial trouble and rely on your car to get to work.
These loans are great if you need fast cash, but they do come with significant risk.
5. Pawnshop Loan
A pawnshop loan is another way of using a high-value item to secure a short-term loan.
For example, you might use a piece of expensive jewelry to take out a loan, then ‘buy’ back the pawned item by repaying the loan within a certain period.
Interest rates can be high, however, and you’ll lose the item if you don’t repay the loan.
What If You Find Yourself Needing Quick Cash Regularly?
Do you find yourself needing quick cash every single month? If you’re living paycheck to paycheck, it’s worth getting some financial advice.
You might need to find a higher-paying job, move to a cheaper area, or cut down on your living expenses.
Want to learn more about managing your money? Check out the finance section of our site today.