Borrowing money has become a way of life. One hundred years ago, it didn’t happen nearly as much. Of course, back then, the standard of living was very poor for many. These days, borrowing is so prolific that we all know someone that has trouble paying back loans and credit cards. And some of us need to borrow just to put food on the table. If you’re worried about the amount you’re borrowing, or you’re looking for new funding sources, here are 10 places that you might find cash:
Most personal and business bank accounts come with an overdraft facility. Very few of them are free to use. Instead, you pay a fee for using it once, and then interest on the amount borrowed. It is unlikely to feature more than once on your credit history unless you go over the limit, or fail to follow the repayment plan agreed with your bank. Overdrafts are designed to be emergency pots should you face a big expense before payday. Regularly using an overdraft might be a sign that you’re living beyond your means.
2. Credit Cards
Credit cards have become an essential part of 21st-century living. We need them to pay for goods and services both online and offline. They also offer an extra layer of protection against fraud or theft than debit cards can. The problem with the humble credit card is that the amount you can borrow often exceeds your monthly income. It’s so easy to lose track of your spending too.
Credit cards can be free to use if you can clear your spending every month. As soon as you miss a repayment, you’re charged interest on the balance. That interest rate can be very high, and it is often compound. This means you pay interest on the interest each month the balance is outstanding. Before you know it, you’ve got a debt you can’t manage, and it grows every month.
3. Mortgage Or Secured Loan
A mortgage is a very large loan at a relatively low-interest rate that is secured against your property. This means that if you miss payments, the lender might have the right to evict you from your home and sell it to cover the outstanding debt you owe. This is why it is so important to keep up your repayments of any loan, but especially one secured against your home.
Of course, very few people can buy a house with cash. The cost is simply too high. If you do have a mortgage, make sure you can make the repayments every month, even if your job is threatened.
4. Consolidation Loan
A consolidation loan is one of the best ways to reduce the costs of other loans you might have acquired. The interest rate is often favourable over debts like credit cards, overdrafts, and some purchase schemes. The ideas found here might help you reduce your monthly outgoings too so that you can have more cash to cover the cost of living. If you’re struggling with debt, you might have to choose this method of getting out of financial trouble.
Small businesses benefit every day from successful crowdfunding campaigns. But many of these agreements are quite similar to loans. You’re also borrowing time when you take cash from investors in this way. You must deliver what was promised, or you might be required to give the cash sums back. Each crowdfunding website is different, so it’s important to be clear about what you are offering and what you are getting.
6. Bank Of Mom & Dad
Borrowing money from your parents when you’re well into adulthood can be tough to take. But these days it has become necessary for many of us. You might need a deposit for your first house or help to pay for your wedding. There could be times when you might need help just covering a large bill. Times have changed, but the generosity of our parents never will.
7. Student Loan
If you have furthered your education, chances are there has been a big bill to pay. Student loans can help you cover the costs up front from university or college. Unfortunately, they have to be paid back. Many student loans attract compound interest. The longer you have them, the larger the loan will get.
Some student loan repayments are deducted from your paycheck. This means you can’t put off paying them, even if you feel your salary isn’t high enough. In some cases, very low-income graduates might have this loan written off without penalty. You might want to consider funding your education in other ways.
8. Personal Loan
A personal loan can be used to buy a car, an appliance, or for any reason at all. You might sign an agreement for a finance plan when you design a new kitchen. Or maybe you went to the bank for some money to pay for a big event? Whatever the reason, these loans can soon add up. Interest rates vary enormously, and repayments can be taken from your bank account on different days of the month. Unless you’re on top of these things, it can all get pretty messy pretty quickly.
9. Loan Shark
A loan shark is an individual that is not legally allowed to lend you money and charge you for it. It is important that people like this are reported. If you take a loan from someone like this, you might be helping to fund criminal organizations and other illegal activities. This type of person might use violence or blackmail against you to get their money back. They might also change the terms of the original agreement. Steer clear from unauthorized lenders.
10. Your Job
Most employers are willing to provide an advance on your paycheck or lend you money without penalty. Of course, they might ask what it is for, and they might introduce terms for the repayment. You will likely need to sign an agreement that your salary will be docked to repay the loan. Make sure you can afford to lose that portion of your salary! Have you ever borrowed from your workplace?
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