{"id":11067,"date":"2020-04-07T16:03:07","date_gmt":"2020-04-07T23:03:07","guid":{"rendered":"https:\/\/financer.com\/?page_id=11067"},"modified":"2023-12-26T08:11:36","modified_gmt":"2023-12-26T16:11:36","slug":"borrow-money","status":"publish","type":"how_to","link":"https:\/\/financer.com\/loans\/articles\/borrow-money\/","title":{"rendered":"Borrow Money"},"content":{"rendered":"\n<p><strong>When you are trying to accomplish a financial goal that you can\u2019t fund with savings\u2013 whether it\u2019s starting a new business, a home purchase, or college tuition \u2013 you\u2019ll need to borrow money.<\/strong><\/p>\n\n\n\n<p>There are many borrowing options available and it can be challenging to find the right lender and loan rates to suit your individual requirements. <\/p>\n\n\n\n<p>To help choose the right lender, here are a few <strong>important questions to consider<\/strong>: <\/p>\n\n\n<div class=\"single-article__steps\"> <style>\n .single-article__steps-items .single-article__steps-content{\n background:#FFFFFF;\n padding:30px;\n margin:0 0 30px 0;\n border-radius:10px;\n box-shadow:0 0 10px 0 rgba(0,0,0,0.14);\n width:calc(100% - 5px);\n}\n .single-article__steps-items .single-article__steps-counter{\n padding:5px 20px;\n border-radius:3px;\n background-color:#F5E7D8;\n display:inline-block;\n top:15px;\n left:-30px;\n position:relative;\n font-size:16px;\n font-weight:600;\n}\n\/* .single-article__steps-items::before{\n content:\"\";\n position:absolute;\n top:20px;\n left:0;\n height:calc(100% + 40px);\n border-left:2px dashed #e0e0e1;\n}*\/\n .single-article__conclusion-tag{\n padding:5px 20px;\n border-radius:3px;\n color:#000000;\n background-color:#F5E7D8;\n display:inline-block;\n top:15px;\n left:-30px;\n position:relative;\n font-size:16px;\n font-weight:600;\n}\n .single-article__conclusion-item{\n background:#FFFFFF;\n padding:30px;\n margin:0 0 30px 0;\n border-radius:10px;\n box-shadow:0 0 10px 0 rgba(0,0,0,0.14);\n}\n <\/style>\n <div class=\"single-article__steps-items\"><div class=\"single-article__steps-counter\" id=\"step_1\">Question 1<\/div><div class=\"single-article__steps-content\"><h3 id=\"Why-do-you-need-money\">Why do you need money?<\/h3><p>What do you need the funds for? This will determine the urgency, the amount, and the time frame you are looking to pay the funds back.<\/p><\/div><div class=\"single-article__steps-counter\" id=\"step_2\">Question 2<\/div><div class=\"single-article__steps-content\"><h3 id=\"How-much-do-you-need\">How much do you need?<\/h3><p>Determine the amount you need to borrow to cover your needs. Never borrow more than you can afford to pay back, and always <a href=\"https:\/\/financer.com\/loans\/personal-loans\/\">compare lenders<\/a> to find the best deal.<\/p><\/div><\/div> <div class=\"single-article__conclusion\">\n <div class=\"single-article__conclusion-tag alt\" id=\"step_3\">Question 3<\/div><div class=\"single-article__conclusion-item\"><div class=\"single-article__conclusion-content\"><h3 id=\"What-can-you-afford\">What can you afford?<\/h3><p>Establish what you can comfortably and realistically afford to pay back on a monthly basis. Lenders will review your monthly income and expenses to determine how much they can reasonably offer.\u00a0<\/p><\/div><\/div> <\/div>\n <\/div>\n\n\n<h2 class=\"wp-block-heading\" id=\"i5_Ways_to_Borrow_Money\">5 Ways to Borrow Money<\/h2>\n\n\n\n<p>Outlined below are some of the best lending options available to US citizens. Each lending method is different, and all have some benefits.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"Banks\">1. Banks<\/h3>\n\n\n\n<p>Borrowing money from your <a href=\"https:\/\/financer.com\/loans\/bank-loans\/\">bank<\/a> can be one of the cheapest ways to get a loan. They offer a variety of lending options from mortgages, <a href=\"https:\/\/financer.com\/credit-cards\/\">credit cards<\/a>, personal loans, and business loans, and can often customize loans to suit individual needs.<\/p>\n\n\n\n<p>Banks make their money by borrowing at a lower rate and lending to their customers at a higher interest rate. Their profit is the difference between the two.<\/p>\n\n\n\n<p>Bank lending can be useful when customers need significant purchase lending, such as a <a href=\"https:\/\/financer.com\/loans\/car-loans\/\">car loan<\/a> or a home loan. Their rates, however, are not fixed and can change throughout the loan agreement.<\/p>\n\n\n\n<p>Banks are often public companies or privately owned, and their main objective is to maximize value for their shareholders. Therefore, your loan is simply a profit driver.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"Credit_Unions\">2. Credit Unions<\/h3>\n\n\n\n<p>Credit unions are like banks, except they are non-profit entities that are owned by their members. <\/p>\n\n\n\n<p>To borrow money from a credit union, you must first become a member. The membership criteria for each credit union are different.<\/p>\n\n\n\n<p>Because their owners are their customers, credit unions can offer loans with lower fees and interest rates.<\/p>\n\n\n\n<p>If you find yourself asking, &#8220;<strong>where can I borrow money instantly?<\/strong>&#8221; The answer is not credit unions. They can take weeks to process applications and payout funds for a loan. <\/p>\n\n\n\n<p>The credit union pools their customer&#8217;s savings and lends them out at a higher interest rate to other members. It is a similar process to how banks work.<\/p>\n\n\n\n<p>If talking to someone in person is essential to you, and you need a more significant loan amount, then a credit union may be the right option. <\/p>\n\n\n\n<p>However, more recently, some online banks and lenders can offer very competitive APRs compared to credit unions and are worth considering as an option before borrowing.<\/p>\n\n\n\n<p>The negative with credit unions is they are much smaller entities than big banks, and communication is usually on location or phone. <\/p>\n\n\n\n<p>Therefore, they may offer less convenience unless you plan on staying near their branch office or offices.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"i401K\">3. 401(k)<\/h3>\n\n\n\n<p>Borrowing from your <a rel=\"noreferrer noopener\" href=\"https:\/\/financer.com\/invest\/401k\/\" data-type=\"URL\" data-id=\"https:\/\/financer.com\/invest\/401k\/\" target=\"_blank\">401(k)<\/a> should only be for emergencies. Taking from your future retirement is generally not a good idea.<\/p>\n\n\n\n<p>The <a rel=\"noreferrer noopener\" href=\"https:\/\/financer.com\/save\/\" target=\"_blank\">money you have already saved<\/a> in your 401(k) is technically yours; therefore, borrowing from it can be somewhat tempting. <\/p>\n\n\n\n<p>Borrowing from your 401(k) usually carries low interest rates but you are paying yourself the interest payments anyways. You can borrow up to 50% of your vested balance up to a maximum of $50,000. General loans must be repaid in 5 years or less while loans used for the purchase of a principal residence may allow a repayment timeline of up to 25 years.<br><br>A big downside when you borrow from your 401(k) is that you are missing out on the opportunity of <a href=\"https:\/\/financer.com\/personal-finance\/calculator\/compound-interest\/\">compounding interest<\/a> or returns since that money is not in your account. <\/p>\n\n\n\n<p><a href=\"https:\/\/financer.com\/calculator\/compound-interest\/\">Compounding interest<\/a> can add up over time and is a massive benefit for a solid retirement plan. The lack of funds in your 401(k) over a long period can be detrimental to your retirement future.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"Online_Lenders\">4. Online Lenders<\/h3>\n\n\n\n<p>Reputable online lenders have become one of the most popular and easiest ways to borrow small <a href=\"https:\/\/financer.com\/loans\/personal-loans-fair-credit\/\">personal loan<\/a> amounts. This industry has become extremely competitive with pawnshops and <a href=\"https:\/\/financer.com\/loans\/payday-loans\/\">payday loan<\/a> stores. <\/p>\n\n\n\n<p>Running completely online has reduced the overhead fees and allowed <a href=\"https:\/\/financer.com\/personal-finance\/interest-rate-apr\/\">APRs<\/a> reduction for consumers.<\/p>\n\n\n\n<p>While some <a href=\"https:\/\/financer.com\/all-reviews\/loan-reviews\/\">online lenders offer to finance large loan<\/a> amounts, most companies focus on providing short-term (30 days \u2013 72 months) small loan lending solutions. <\/p>\n\n\n\n<p>Each online lender has different fees associated with loan origination, and all APRs are different for each company and the customer\u2019s credit score.<\/p>\n\n\n\n<p>You can <strong>borrow money online instantly<\/strong> with some online lenders. Their application process takes a few minutes and their decision is generally made the same day for small loan amounts. <\/p>\n\n\n\n<p>This can be very helpful when you need to borrow money asap. <\/p>\n\n\n<div class=\"fn_block block_fn_button buttons is-flex is-flex-direction-column is-align-items-center\"><a href=\"https:\/\/financer.com\/results\/query\/1\/filter_non_affiliate\/1\/param_amount\/1000\/param_period\/90\" class=\"button is-rounded is-primary is-large\" target=\"_blank\" >Compare Lenders <\/a><\/div>\n\n\n<p>There are many online lenders to choose from. Borrowers can compare multiple companies based on rates and fees to ensure they are getting the best deal to suit their needs.<\/p>\n\n\n\n<p>Online lending can be the best option when borrowing money with <a href=\"https:\/\/financer.com\/how-to\/get-a-personal-loan-for-bad-credit\/\" data-type=\"how_to\" data-id=\"20528\">bad credit<\/a>.<\/p>\n\n\n\n<p>Borrowing money online can be beneficial when wanting to consolidate debt to a lower-interest rate loan. It can also help improve a damaged credit score if borrowing is done prudently and loan repayments are paid on time.<br><br>When you are wondering how to borrow money online, our online personal lending calculator can help you find and compare rates from multiple lenders at once. It does <strong>not affect your credit score<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"Credit_Cards\">5. Credit Cards<\/h3>\n\n\n\n<p><a href=\"https:\/\/financer.com\/credit-cards\/secured-credit-cards\/\">Credit cards<\/a> can be an excellent short-term solution for a quick cash injection. They do carry risks if used unwisely. Using a <a href=\"https:\/\/financer.com\/credit-cards\/unsecured-credit-cards\/\">credit card<\/a> without understanding the fees can cause long-term financial hardship.<\/p>\n\n\n<div class=\"fn_block block_fn_button buttons is-flex is-flex-direction-column is-align-items-center\"><a href=\"https:\/\/financer.com\/credit-cards\/\" class=\"button is-rounded is-primary is-large\" target=\"_blank\" >Find A Credit Card<\/a><\/div>\n\n\n<p><a href=\"https:\/\/financer.com\/credit-cards\/unsecured-credit-cards\/\">Credit card<\/a> interest is most often on the higher interest side of personal lending. However, with no lending fees, short-term borrowing can be beneficial.<\/p>\n\n\n\n<p>If you need a credit card, we have put together a list of some of the best <a href=\"https:\/\/financer.com\/best-first-credit-cards-of-2020\/\"><strong>credit card<\/strong><\/a> options.<\/p>\n\n\n\n<p>If you can pay off your <a href=\"https:\/\/financer.com\/credit-cards\/unsecured-credit-cards\/\">credit card<\/a> balance by the end of each month, you are borrowing money at 0% interest. <\/p>\n\n\n\n<p>The downside occurs when you miss paying off a balance in full for a month, and the interest is now added on to your <a href=\"https:\/\/financer.com\/loans\/north-carolina\/\">loan balance with exorbitant fees<\/a> which can easily top 20% interest annually.<\/p>\n\n\n\n<p>The other negative of borrowing using a credit card is the effect it may have on your credit score. If <a href=\"https:\/\/financer.com\/blog\/2020-american-household-credit-card-debt-report\/\">credit card debt<\/a> is unpaid, it reduces your chance to borrow from other lenders.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"Boost_Your_Chances_of_Getting_a_Personal_Loan_Approved\">Improve Your Chances of Getting a Personal Loan Approved<\/h2>\n\n\n\n<p>There is no one-size-fits-all method for getting a personal loan application approved. <\/p>\n\n\n\n<p>Credit score and income requirements differ by lender, and some online lenders consider nontraditional data such as free cash flow or education level.<\/p>\n\n\n\n<p>However, loan companies all have one thing in common: they want to be paid back on time, which means they <a href=\"http:\/\/financer.com\/blog\/why-cant-i-get-a-loan\/\" data-type=\"URL\" data-id=\"http:\/\/financer.com\/blog\/why-cant-i-get-a-loan\/\" target=\"_blank\" rel=\"noreferrer noopener\">only accept borrowers who fit their criteria<\/a>. <\/p>\n\n\n\n<p>Here are three suggestions to help you apply for a personal loan.<\/p>\n\n\n<h3 id=\"How_To_Get_a_Personal_Loan_Approved\">How To Get a Personal Loan Approved<\/h3><div class=\"single-article__steps\"> <style>\n .single-article__steps-items .single-article__steps-content{\n background:#FFFFFF;\n padding:30px;\n margin:0 0 30px 0;\n border-radius:10px;\n box-shadow:0 0 10px 0 rgba(0,0,0,0.14);\n width:calc(100% - 5px);\n}\n .single-article__steps-items .single-article__steps-counter{\n padding:5px 20px;\n border-radius:3px;\n background-color:#F5E7D8;\n display:inline-block;\n top:15px;\n left:-30px;\n position:relative;\n font-size:16px;\n font-weight:600;\n}\n\/* .single-article__steps-items::before{\n content:\"\";\n position:absolute;\n top:20px;\n left:0;\n height:calc(100% + 40px);\n border-left:2px dashed #e0e0e1;\n}*\/\n .single-article__conclusion-tag{\n padding:5px 20px;\n border-radius:3px;\n color:#000000;\n background-color:#F5E7D8;\n display:inline-block;\n top:15px;\n left:-30px;\n position:relative;\n font-size:16px;\n font-weight:600;\n}\n .single-article__conclusion-item{\n background:#FFFFFF;\n padding:30px;\n margin:0 0 30px 0;\n border-radius:10px;\n box-shadow:0 0 10px 0 rgba(0,0,0,0.14);\n}\n <\/style>\n <div class=\"single-article__steps-items\"><div class=\"single-article__steps-counter\" id=\"step_1\">Step 1<\/div><div class=\"single-article__steps-content\"><h3 id=\"Clean-Up-Your-Credit\">Clean Up Your Credit<\/h3><p><\/p>\n<p>Credit scores are important factors to consider when applying for a personal loan. The higher your score, the better your chances of acceptance. <span style=\"font-weight: 400;\">Make sure to check <\/span>the records for mistakes.<\/p>\n<p> <\/p>\n<p>According to the <a href=\"https:\/\/www.consumerfinance.gov\/\">Consumer Financial Protection Bureau<\/a>, common errors that can harm your credit score include <span style=\"font-weight: 400;\">unowned<\/span> accounts being included, closed accounts listed as available, and incorrect credit limits.<\/p>\n<p> <\/p>\n<p>Keep track of your payments. If you haven&#8217;t already, start making monthly payments on all your loans, and pay more than the minimum when you can.<\/p>\n<p> <\/p>\n<p>This would improve your payment history as well as your credit utilization ratio, which is the amount of your available credit that you are using. These two factors account for 65% of your FICO ranking.<\/p>\n<p> <\/p>\n<p>Requesting an increase in your credit line can improve your credit utilization as well. Request an increase by calling the customer service numbers on the back of your credit cards.\u00a0<\/p>\n<p> <\/p>\n<p>If your income has increased since you received the card and you have not missed any payments, you have a better chance.<\/p>\n<p><\/p><\/div><div class=\"single-article__steps-counter\" id=\"step_2\">Step 2<\/div><div class=\"single-article__steps-content\"><h3 id=\"Re-balance-Your-Debts-and-Income\">Re-balance Your Debts and Income<\/h3><p><\/p>\n<p>Loan applications request your annual salary, which may include earnings from part-time jobs. Consider starting a side hustle to supplement your salary, or work for a promotion at your current job.<\/p>\n<p> <\/p>\n<p>Also, do all you can to reduce your debt.<\/p>\n<p> <\/p>\n<p>Consider liquid assets, such as stocks kept in taxable accounts. Experts agree that applying the proceeds to high-interest consumer loans could result in a higher rate of return.<\/p>\n<p> <\/p>\n<p>Increasing your income and decreasing your debt lowers your debt-to-income ratio, which is the number of your monthly debt payments divided by your monthly income.<\/p>\n<p> <\/p>\n<p>Although not all lenders have strict debt-to-income (DTI) criteria, a lower ratio indicates that you have leverage over your current debt and can take on more.<\/p>\n<p><\/p><\/div><\/div> <div class=\"single-article__conclusion\">\n <div class=\"single-article__conclusion-tag alt\" id=\"step_3\">Step 3<\/div><div class=\"single-article__conclusion-item\"><div class=\"single-article__conclusion-content\"><h3 id=\"Find-the-Right-Lender\">Find the Right Lender<\/h3><p>Most online lenders state their minimum credit score and annual income requirements, as well as whether they accept co-signers. You will pre-qualify for financing if you meet a lender\u2019s minimum requirements and want to see estimated rates and conditions. Pre-qualifying for most lenders results in a soft credit pull, which has no effect on your credit score.<\/p>\n<p>Pre-qualify with many lenders and\u00a0<a href=\"https:\/\/financer.com\/personal-finance\/calculator\/interest\/\">compare interest rates<\/a>\u00a0and conditions. The best loan choice has costs and fees that are within your financial constraints.<\/p><\/div><\/div> <\/div>\n <\/div>\n\n<div class=\"fn_block block_fn_faq_list\"><h4>How can I borrow money immediately?<\/h4><div class=\"faq_inner\"><p>If you need a personal loan, the fastest way to borrow money is to find an online lender. If you already have a credit card, you can request a cash advance.<\/p><\/div><h4>Where can I borrow money?<\/h4><div class=\"faq_inner\"><p>You can borrow money from online lenders, credit unions, banks, financing companies, and more.<\/p><\/div><h4>What is the cheapest way to borrow money?<\/h4><div class=\"faq_inner\"><p>The cheapest way to borrow money will either be from a bank, credit union, or an online lender. All lending rates are dependent on your credit score. The higher your score the more creditworthy you are to lenders, which will lower your credit risk reducing your rate.\u00a0<\/p><\/div><h4>Can you borrow money if you have bad credit?<\/h4><div class=\"faq_inner\"><p>The quick answer is yes! Most lenders will look at your credit score when considering your application along with your current income. Some lenders specialize in offering loans for bad credit. They can even help you improve your credit if the loan is paid on time.<\/p><\/div><\/div>","protected":false},"author":11463,"featured_media":19417,"comment_status":"open","ping_status":"closed","template":"","meta":{"disable_branded_featured_image":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ep_exclude_from_search":false,"footnotes":""},"categories":[1076],"_links":{"self":[{"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/how_to\/11067"}],"collection":[{"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/how_to"}],"about":[{"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/types\/how_to"}],"author":[{"embeddable":true,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/users\/11463"}],"replies":[{"embeddable":true,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/comments?post=11067"}],"version-history":[{"count":49,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/how_to\/11067\/revisions"}],"predecessor-version":[{"id":33189,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/how_to\/11067\/revisions\/33189"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/media\/19417"}],"wp:attachment":[{"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/media?parent=11067"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financer.com\/wp-json\/wp\/v2\/categories?post=11067"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}