A binder labeled "loans."

5 places you can get loans from

Unexpected bill payments, an emergency, buying a new car, purchasing your first home, or renovating your current one; there are countless occasions that could arise and lead you down the path of needing a loan. But, how do you go about getting your hands on the extra funds that you need? There are many different avenues you can pursue if you are in need of a loan, and some may be better for you and your current situation than others. Here are 5 different options available to you in the event that you find yourself needing a loan.

Banks

Going to your bank is the most traditional way of getting a loan. However, it can also be one of the most challenging/expensive ways to do so. Many banks require a high credit score, or valuable collateral in order to apply for a loan, and typically charge more in interest than other avenues. To make the process easier on yourself, be sure to have all your paperwork in order, and know the ins and outs of your financial situation when applying for your bank loan. In addition, having accounts already open, and in good standing, with the bank you are seeking a loan from will work well in your favor.

Credit Unions

Credit unions are considered not-for-profit organizations and offer borrowers an alternative to the typical bank loan. Because credit unions are not-for-profit, they do not pay taxes, which in turn allows them to offer lower interest rates to their members. Their account holders technically own credit unions, which means most credit unions require you to become a member in order to apply for a loan.

Peer-to-Peer

Peer-to-Peer loans allows borrowers the ability to receive loans from their “peers”, normally in the form of individual investors. P2P offers an alternative to traditional bank loans, and has developed with the digital age as it is done exclusively online. Sites match borrowers with investors, and depending on their credit, borrowers can get rates as low as 5.5% with a 24-month term.

Friends/Family

Depending on your family, or even friend situation you may be able to avoid heavy interest rates and borrow from someone close to you. Be sure that parties involved understand the terms in which you are borrowing the money, and when/how it should be paid back. There are even helpful resources online that can help you build free legal documents to help ensure everything stays orderly between both parties, and that good relationships don’t turn sour.\

Cash Advances

Short-term cash advance loans can be handy in a pinch, but should be used with caution. Cash advances are short-term loans that you can receive through your credit card company, or an online lender at a low (initial) cost. That cost however skyrockets in the way of interest if the loan is not paid back in full by a certain date. It is important to ensure that you will be able to repay the full cost of the loan by the time of the repayment date in order to avoid steep charges.