Most people around the world are severely cash-strapped due to the ongoing coronavirus pandemic. Even if people are getting short of cash and would have to rely on their credit cards due to unemployment, many credit card issuers still limited and closed some accounts.
Loans are a lifeline, thankfully. In fact, most loans are now giving rock-bottom interest rates. One of the loans with the lowest rates is personal, unsecured loans. It’s the most attractive financing option for borrowers with no equity.
Even without collateral, you can take out any amount and get the funds right away with a personal loan. The best part is it doesn’t require excellent credit. If you’re in dire situations, here are four ways to get a personal loan as soon as possible.
When it comes to the best lenders for quick cash, online lending companies are always a top choice for installment loans for bad credit borrowers. These companies use algorithms to review a borrower’s application, which makes the process easier and faster.
As a borrower, what you will only do is to fill out the online application forms provided by an online lender. Also, you have to upload your most recent pay stubs (for income verification) and bank statements.
What’s more, online lending companies don’t only keep an eye on the income and credit of a borrower. They are also open to considering the level of education and length of employment as the basis of the borrowers’ creditworthiness.
Its only downfall is that you’ll have to pay higher rates, which are much higher than other credit unions and banks. Still and all, its advantages outweigh its disadvantages, especially if you’re in need of immediate funds. You can get the borrowed money as fast as within the day of application.
Banks are always the best option if you want to loan larger amounts of money. Online lending companies’ maximum lending capacity is $50,000 on average. If you have to pay for an extravagant wedding or finance a big purchase like a car, it’s better to get personal loans from banks.
Like online lenders, some banks have already digitized their banking services. However, there are still other banks that are manually underwriting loans. The worst scenario you can expect is to wait for two weeks or more before you’ll know whether you’re qualified for a personal bank loan or not.
More importantly, banks, whether traditional or online, are always risk-averse. Without excellent credit, borrowers might have a hard time qualifying for a loan. The good part is, once you’re already a customer, you can enjoy loyalty discounts!
Another membership-driven institution is the credit unions. Compared to all kinds of lenders, they have the lowest fees and rates that even borrowers with average credit could enjoy. You can say that credit unions are the friendliest type of financing that’s open to most credit types, but unfortunately, not to everyone.
First off, credit unions are nonprofit financial institutions. Put simply, the members are the owners of the credit union. In order for you to enjoy the benefits of credit unions, you have to be one of the members.
The membership process isn’t difficult. Usually, you only have to open an account, either checking or savings, with a minimum of $5 balance. The only problem is, credit unions are only open for specific professions, employees of an affiliated company, or people from geographic locations. That’s why the membership isn’t open to everyone.
Opting to peer-to-peer (P2P) lenders is one way to cut down financial institutions as the middlemen. From the term itself, peer-to-peer lending, which is also known as the “crowd” or “social” lending, allows borrowers to directly connect to the investors.
Like banks, you can apply for bigger loans so long as you’re creditworthy. P2P lenders are open for auto financing and even home improvement loans. However, since this type of loan is backed by an individual, receiving the funds can take a little longer.
Peer-to-peer lenders are almost similar to online lenders. The process is quick—fewer requirements, faster processing. Also, both of their platforms are over the Internet. The only difference is that an online lender is a company with its own online lending platform, while a P2P lender is an individual offering a loan in a P2P lending site.
Now, here’s the thing. A P2P lending site charges both a borrower and a P2P lender. Meaning, if things go wrong, a P2P lending site may charge late fees, loan origination fees, bounced-payment fees not only to a borrower but also to the P2P lender.
The first thing to do in borrowing money is to nail down your priorities. For bigger loan amounts, banks are the most trustworthy financing source, while credit unions have the lowest rates. If you need quick funding, an online lender might be the way to go. But, if you want to be less involved in any applications, opt for a peer-to-peer lender.