Looking for a way to escape the clutches of Visa, MasterCard, Discover, American Express and their counterparts? If you need to borrow money and you don’t want to do it with credit card companies, you definitely have other options.
Here are some ways to borrow money without swiping that plastic. Some of these options may be better for you, while others will clearly cost more money. Whether or not you choose to use any of these options are up to you – but it’s always good to know your options!
Borrow money from friends or family: If you’re strapped for cash and you need to borrow money, turning to those around you can be a simple solution without having to take out money from a financial institution or charge it to a credit card. While you might not be charged any interest by someone you’re close with and you may not need a great credit score to borrow from someone you know, taking out a loan from friends or family can get very complicated and emotional very quickly. Be sure to define the terms in writing and have both parties agree to those terms before you borrow any money. The last thing you want is an argument about who owes who what at the next family get-together.
Ask for a loan from the bank or a nonprofit: Depending on your reason for borrowing money, there may be a specific type of lender or loan available for you to borrow from. For example, there are many different types of loans available for small businesses, which may be offered by your current bank or credit union or by a local nonprofit that specializes in small business development. Nonprofits especially are excellent resources to investigate if you’re looking for a loan or grant to pay for business- or education-related expenses. You may be able to subsidize the cost without having to borrow any money at all.
Review your “alternative” loan options: Taking out an alternative loan like a payday loan or a car title loan is definitely one way to avoid credit cards, but this option involves serious risks and will cost you significantly more money than if you just charged the money to your credit card. While you might not need a great credit history to borrow from either of these options, you could pay an interest rate upwards of 400 percent APR! Be careful when considering payday loans or car titles – it’s an easy way to get trapped in a cycle of debt.
Look for online alternatives, like peer-to-peer lending: More and more websites are popping up that offer alternative credit solutions like peer-to-peer lending solutions. Peer-to-peer lending can be a good option for those with less-than-perfect credit, those who want to borrow without having to use a credit card and those who want to make a return on their money by lending directly to others. Other websites like FloatMoney.com and LendUp.com are also starting to appear that offer alternative borrowing solutions for consumers who are looking for options besides credit cards and payday loans. The online marketplace is creating more opportunities and alternatives to credit cards, so doing a little research on the web can definitely pay off!
