We all find ourselves in situations where money is tighter and you may not have enough to cover your various expenses. Being able to borrow money online can be a great way to access funds quickly and relatively easily just by filling out an application through a website. In fact, Forbes reported that nearly 70% of Americans have stated that borrowing money has improved their finances. However, within the world of borrowing money fast online, there are different alternatives to consider and many factors to think about before deciding whether or not to borrow money.
By 2021, data from Finder found that around 51.3% of Americans (131.0 million) had used a personal loan at some point of their lives. Since the coronavirus pandemic, this figure is even higher.
More and more Americans have turned to borrowing money online to help them with their finances. This includes everything from people who need to get a $500 loan today to people needing a $1000 cash advance to get them through a tough month. In fact, 37.17% of those borrowing money did so to consolidate their debt. Other common uses were starting a new business (27.41%) or covering medical expenses (26.36%).
What Are The Fastest Ways To Borrow Money?
If speed is of the essence, there are some ways to borrow money online that are quick and straightforward; however, quick access to money may not always be the cheapest option and you should always think about the potential implications if you fail to meet your repayment with your lender. Furthermore, sometimes, the fastest ways to borrow money online may not necessarily be the best option for you in your circumstances. You may therefore need to look at other loan options like secured loans or otherwise.
Also, always make sure that any loan, be it a payday loan or otherwise is legal in your state. For example, you may well be able to get an instant payday loan in Texas, or online payday loans in Florida, whereas other states like New York do not permit payday lending.
Payday Loans Online
Payday loans are known to be one of the quickest and easiest ways to borrow money which is probably why around twelve million Americans use payday loans every year. They allow you to borrow small amounts of money on a short-term basis (usually 2-4 weeks). Unlike other methods, they do not require a strict credit check meaning that you can usually qualify for a loan within minutes of applying online. The eligibility criteria is far less strict for payday loans than for other types of borrowing. As a result, it means that if you are approved, you can have the money in your account within 24 hours, whether you need to borrow $100 or even as much as $5000 or more..
However, although this is a sure-fire way to borrow money fast, it is one of the most expensive ways to borrow. Payday loans are notorious for their sky-high interest rates, sometimes with APRs of over 1,000%. Subsequently, payday loans should only be used as a last resort and always with caution. An average payday loan is $375 for a two-week loan period, equating to an average of $520 in fees.
Credit Cards And Loans
Credit cards and loans can work out as one of the most affordable ways to borrow money, depending on your financial situation. The majority of credit cards and loans can be easily applied for online; however, there is an element of waiting time before receiving the cash as you need to be approved for the credit. However, in some cases, this can be a quicker process.
If you are able to wait to receive the card and have a strong credit rating, taking a credit card out can be one of the cheapest ways to borrow money online.
In the majority of cases, you can apply online and receive instant approval. Once this step has happened, you merely need to wait to receive the card in the post – this can be as little as 3-5 working days although can sometimes take longer so it just depends how long you are able to wait. In some cases, it could take up to 10 working days or longer if the credit card provider requires more information to make a decision.
Another option is to apply for a personal loan online. This can often be very quick, especially if you are already a customer of the bank where you are applying. If this is the case, depending on the particular circumstances, you could get the money on the very same day that the loan has been approved. When applying online, you can usually receive instant approval. If you choose to take out a loan with a bank where you are not currently a customer, it may take longer to receive approval – this could be up to five working days or, if you are lucky, as quick as the next working day.
Buy Now, Pay Later (BNPL)
BNPL schemes have been growing in popularity and are more readily available than they used to be. You can find BNPL options across many online retailers and it is a quick and convenient way to pay for things upfront. The idea of BNPL is that it allows you to delay paying for your items so that rather than paying the full amount upon point of purchase, you can pay for the item in interest-free installments. The exact terms and conditions will vary depending on the BNPL service you choose.
However, like any loan, this should always be viewed as money that you will eventually need to pay back. One of the dangers of BNPL is that you can get into the habit of overspending, forgetting that you will still need to repay the funds. If you are unable to repay, you can incur high fees.
Extend Your Overdraft Or Credit Limit
If you have an existing overdraft with your bank, you can apply online to increase your overdraft or limit immediately. Depending on the bank, there may be an additional fee applied; however, some accounts will let you borrow a few hundred dollars interest-free which could be a good option if you need fast funds.
If you are already an existing credit card customer, you could increase your credit limit instantly by applying online. In the majority of cases, you will need to have had the card for at least six months without increasing your credit limit.
What Are The Alternatives To Borrowing Money Online If You Need Quick Funds?
If you need money quickly but are unsure about taking out a loan, there are other options available that may incur less risk. However, there are no risk-free options when it comes to borrowing money of any amount. No matter how large or how small the money you need is, ultimately, seeking to borrow money and any loan at all will put you in some form of debt that will need to be paid off; interest-free or not.
Ask Your Friends And Family
If you have an unexpected bill that you are unable to cover and need money in the short term, it might be better to look to friends and family before turning to a bank or an online short-term loan. Although it can sometimes be an uncomfortable conversation to have, asking friends or family to lend you money in the short-term can help save you a lot of money on interest rates. However, you should still treat the repayment as seriously as you would with any other loan, making sure to agree the repayment terms and dates before entering an agreement.
Work With A Credit Union
Online loans may seem like the quickest and most straightforward method of taking out cash; however, they hold serious long term implications regarding interest rates and debt, and can often leave you more out of pocket than you were in the first place. For small amounts of money, you could explore options with your credit union; these institutions can typically offer small loans with much lower interest rates than other lenders.
Explore Payday Advances
Depending on the company that you work for, there may be an existing payday advance policy. This is a way for employees to request an advance on their pay check if they find themselves short of cash before payday. The information regarding this may be in your contract or you can ask your employer directly.
Approach Existing Creditors
If you already have a loan, taking out an additional loan to cover costs is not a good idea as it could land you in further debt and can make it much more difficult to manage your monthly outgoings. Before taking out another loan, speak to the creditor of your existing loan. You may be able to renegotiate the terms of your existing repayment plan meaning that you might be able to get an extension.
What Do You Need To Consider Before Borrowing Money Online?
Before borrowing money online, there are certain steps you need to take to make sure that you are staying safe and secure online and getting the most suitable option available for your specific needs. You should also make sure that you only consider borrowing money from reputable lenders and not any illegal enders in your state, no matter how tempting that may seem.
Do Your Research On Any Finance Options
Always thoroughly research your options before borrowing money online. When you are trying to get cash quickly, it can be tempting to take the first option you see. However, you may not be getting the best deal possible so it is always important to shop around and explore the different options. For example, a preliminary search of borrowing money quickly online will likely yield results of high-interest payday loans with strict repayment conditions. Keep looking to see if you can find something with a more flexible repayment plan that may be able to lend you more money at a lower interest rate.
Determine How Much Borrowing Money Will Actually Cost
When weighing up the different options available, think about not just the amount of money that you are borrowing, but the cost of borrowing. Read the terms and conditions of the different companies to determine how much the APR is and how much any additional fees might be. You should always factor these additional costs in so that you can work out the true cost of the loan.
Make Sure You Can Afford The Loan
One of the biggest mistakes you can make when looking to borrow money online fast is to take out money that you cannot afford to pay back. This can trap you in a perpetual cycle of high interest debt and can be very difficult to come back from. When calculating the price of the loan and the additional fees, make sure that you can budget for this additional monthly repayment, taking into consideration your existing income, monthly expenses and the length of the loan term.
Stay Out Of Debt
Due to the short-term nature and convenience of some online loans, specifically payday loans, it can be easy to get into the habit of taking out multiple small loans. However, when factoring in the high interest rates and fees, you can see how this quickly adds up. Sometimes, although you may want fast funds, it might be worth opting for an alternative to online payday loans; though you may want speed in the short term, you could end up having to pay far more in the long term and could be putting your financial situation at risk which you should of course at all times try your hardest to avoid.