Getting fast cash loans for unexpected bills and expenses that come up can solve your financial worries. If you have no credit, you may think of getting a payday loan, which has low fees. However, they have very high interest rates, such as at an 800% annual percentage rate (APR). You also have a higher risk of losing your car or property that was put up as collateral against the loan.
Here are some of the ways you can get a good fast cash loan:
Short-term loans have high interest rates and fees. If you can pay back the loan with your next pay cheque, you don’t have to pay much interest in the long term.
- Banks and credit unions – These provide unsecured/signature loans that don’t have collateral such as a car or property. However, you need a good credit rating to be eligible for their loans. Speak to your local bank or credit union about getting a fast cash loan. But compare different loans first and then pick the lowest-rate loan with low fees.
- Loan from family or friends – Alternatively, ask your family or friends for a loan, which is a low-risk option. The terms of the loan should benefit all members. Do this by creating a written agreement with the agreed interest rate, repayment terms, any collateral, and the ramifications of not paying the debt. Make sure everyone is clear on the agreement to avoid damaging a relationship down the track.
- Co-signer – Get someone with a good credit history to co-sign a loan with you. Just remember that the creditor will ask your co-signer to pay your debt in full if you don’t pay the loan back yourself. Don’t make defaults or late payments, as these will be noted down in both your credit reports.
- Credit card – Credit cards provide cash advances via cheque or ATM access. Once you take out the money, interest will begin to accumulate, which can be up to 25%, and fees are 2-4%.
- Non-bank lenders - Some lending agencies specifically provide cash loans. The interest rates are usually higher than a more long term loan, but the approval process is faster so you can get the money you need sooner. Generally, cash loans are offered at a capped amount.
Long-term loans have low interest rates, so it doesn’t cost much to borrow a large amount of money. However, these types of loans take longer to obtain and are high risk because they require you to put your car or property up as collateral for the loan.
- Home equity line of credit (HELOC) – Use your home’s equity to get a low interest-rate line of credit that is tax-deductible. You can spend it as you want, but if you can’t pay back the debt, you put your home at risk of being repossessed by the lender.
- Secured bank loan – Home/car equity loans or, as mentioned above, HELOCs are high-risk secured bank loans that have a car or property as collateral. Interest rates can be as low as 5% depending on what your credit rating is. HELOCs come with variable interest rates and money can be withdrawn as needed.
- Peer-to-peer lender – You can borrow money online with a low interest rate from an individual lender. The process involves posting a loan listing with the loan amount and your reasons for wanting the loan. Then it will be reviewed by peer-to-peer lenders who will also check your credit rating to determine your interest rate and fees, and a lender will approve your loan application if you meet their criteria.