We all need to borrow money at some point in our lives, either to cover emergency repairs or help pay off bills, buy a car or even set up a business. However, there are many different types of ways to borrow money, some of which could help you to take out the money you need without paying a ridiculous amount of interest on top. Here are five ways of borrowing money that could be worth trying out.
Borrow from a friend or family member
For small amounts, borrowing from a friend or family is often the best option. You don’t have to deal with interest and you may have more flexibility when it comes to paying it back. It can also be an excellent option if lenders are refusing to pay you due to a low credit rating. Of course, this shouldn’t be an excuse to delay payment as long as possible – by not paying back you could put a strain on the relationship between you and your family and friends. Only ask close relations if you can trust yourself to pay the right amount back.
Try peer-to-peer lending
For loans that you don’t need in a hurry, why not try peer-to-peer lending sites. These sites allow other users to lend you money. You have to pay interest to these lenders, however it’s a lot less than other loan methods. Peer-to-peer lending is great for raising huge amounts for causes and business start-ups as it allows multiple people to lend you money until you’ve reached your desired amount. These people get to choose you based on your cause, so make sure it’s a cause people can relate to.
Use an employee benefit scheme
There are companies that offer employee financial wellbeing schemes. These can allow you to take out loans, the monthly payments of which are directly taken out of your wages. This can be useful if you often overspend your wages on other things and then find yourself unable to pay a loan payment. Such schemes also have other protection benefits that can help you as an employee.
Use a no interest credit card
Credit cards are useful for paying many emergency out-of-pocket expenses from car repairs to vet bills. Many cards charge interest, but some offer no interest at all. These deals are usually only for a select amount of time (often 18 months), after which you do have to pay interest. However, it can be worth taking advantage of these deals nonetheless. No interest credit cards still have a transaction fee every time you use them, but this is minimal. Just make sure you do pay your credit card bills on time, otherwise you could lose this privilege.
Get help from a loan broker
Loan brokers can be hired to shop around for the best loan for you. If you’ve got a low credit score and many lenders are rejecting you, brokers can be handy to use. Brokers can also be good for applying for huge loans in which lenders may need some persuasion. Loan brokers do charge for their services, but can have their uses.