5 Smart Ways to Borrow Money

Most people will tell you to be careful when borrowing money, but that doesn’t mean you shouldn’t ever do it. In fact, borrowing money strategically can provide you with much needed financial freedom, the ability to take advantage of time-sensitive investment opportunities, and even a way to raise your credit rating. Sometimes, borrowing can even help you out of a difficult situation by allowing you to meet a deadline that’s coming up before your next paycheck. If you want to be able to do that though, you’ll need to know how to borrow money quickly.

Different Loans for Different Borrowers

Most bank loans take significant time to process, which makes them impractical for borrowers on tight schedules. Fortunately, there are plenty of faster ways to borrow money if you need it. Remember: borrowing is something you should only do when you have a plan to pay back the money and any additional interest or fees you accrue during the process. That said, here are five of the fastest ways to borrow money when you need it most:

1. Credit cards: chances are you already have a credit card, but even if you don’t it’s quite easy to become approved for one. Credit cards provide some of the most convenient and immediate borrowing options for consumers, which makes them a popular choice. The trick is that all that convenience can be seductive; many people end up using their credit cards more often than they realize and racking up mountains of debt. Some credit cards also have high interest rates, which means that if you’re only making minimum payments you’ll be accruing substantial fees on your remaining balance each month.
2. Lines of credit: lines of credit generally have lower interest rates than credit cards, but function in much the same way — they’re versatile sources of credit that can be used to purchase anything the borrower wants. However, lines of credit should be used sparingly for best results, since they often have much larger credit limits and can create substantial debt when maxed out.
3. Home equity loans: borrowing money from the equity you own in your home is usually a fairly quick process, but remember: you’ll be using a portion of your house as collateral. Although the interest rates for such loans are normally on the lower end of the spectrum, defaulting on these loans puts your home at risk.
4. Payday loans: using a portion of your next check as security for a payday loan can be an excellent way to borrow a small amount of cash in an extremely short period of time. Keep in mind that payday loans are normally limited to a couple hundred dollars or so, and that you’ll usually need to have both a job and a bank chequing account to apply for one.
5. Car title loans: these loans use a portion of the equity you own in your car to secure the money you borrow. They’re similar to home equity loans in terms of the way in which they’re structured. However, these loans offer less risk than home equity loans, while providing more money and time to repay the loan than a payday loan. They often represent ideal solutions for borrowers who need fairly substantial amounts of money quickly.

Do Your Research

Understanding the number of options available to you when you need to borrow money fast and comparing their pros and cons can help you make more responsible financial decisions and plan for future success. Use this guide to choose the right loan for yourself so that you can borrow responsibly.