How to Avoid Private Loans with Family and Friends
When you find yourself struggling to pay your bills or pay for necessities it can be tempting to ask for money from your friends or family. In an emergency situation it can feel like the more official way of borrowing money is just too complicated or takes too much time. But the problem with borrowing money from a friend or family member is that it can put a huge strain on your relationship. If you find yourself unable to payback the money they lent you, things can get extremely awkward, and it can often lead to a broken friendship. Fortunately there are other ways of borrowing money that is not only convenient but also very simple, so you will never be in the situation where you need to ask for money from someone you personally know.
Borrow From a Credit Union
Credit unions are run by their own members, which makes them a good place to turn to when you are in need of some cash. They usually offer great terms and very friendly and supportive service. Borrowing from a credit union is restricted by either your location or your occupation. For example some credit unions are just for police officers, others are just for people who live in New York City. Research the nearest credit union to you, to start looking at getting a loan from them, but keep in mind that you have to save a certain amount of money for a couple of months before you are allowed to borrow from a credit union.
Get a 0% on New Purchase Credit Card
These types of credit cards let you make any size purchase, and spread the payments over up to eighteen months. As long as you make your payments on time it is completely free. It is crucial that you are able to make the minimum monthly payments and payback all the debt before your 0% deal is over, otherwise you will be subject to huge penalties and future interest.
Borrow From a Social Lender
You don’t have to borrow money from a family or friend when you can borrow from a complete stranger! Social lending allows ordinary people to borrow and lend money without the involvement of a bank. If you are interested in getting loans from a social lender, check out Zopa, Yes-Secure, and RateSetter, which all have flexible terms.
Remortgage Your House
You can remortgage your house to borrow money in an affordable manner. Just make sure you make repayments quickly, otherwise remortgaging can get expensive in the long run.
Get a Secured Loan
These types of loans are secured against your house or other amenities. This means that if you are unable to repay your loan, the lender is in the right to get a piece of the money you make from selling your house, or in some cases can even repossess it.
Get a Low Interest Rate Credit Card
You can find credit cards that offer a fixed, low interest rate of only 6 or 7 percent, but only if you have a good credit score. These types of credit cards offer a very flexible repayment schedule, but make sure you keep on top of repayments, and don’t borrow more than you can pay back.
Use a Payday Loan Lender
This option should only be considered if you are in dire need of cash. These loans are short-term and come with extremely high interest rates, and will penalize you if you are unable to pay them back in 30 days.