Four Ways to Borrow Money That You Might Not Have Tried (Yet)
Times are tough. We are at the heels of a pandemic-induced recession. Many have lost jobs and opportunities, and this has lead to many of us finding other ways of making ends meet. Perhaps you’ve tried selling some of your craft or taking odd jobs. Maybe you’ve had to cut back significantly on spending. Sometimes, however, these solutions are really just not enough.
This is why many of us have turned to borrowing money. We go to the bank and apply for a loan for whatever purpose we need one for. That’s probably our first and sometimes only instinct, but did you know that there are other channels for borrowing money that you’ve probably overlooked? You either know about them but forgot or were simply not aware that these avenues existed at all.
Before anything else, it’s important to note that borrowing money is a serious, sacred act—one that we shouldn’t tread lightly. Taking out a loan requires discipline and a sense of responsibility.
It’s also not necessarily a bad thing, especially if it will open you up to an even bigger opportunity for growth and if you have a clear plan for paying it back.
Borrowing money from a pawnshop is probably one of the purest, most basic ways to do it. And it’s also fairly reasonable, especially since it’s a collateral-based loan.
We all know how it works. You take one of your valuable belongings to a pawnbroker, who assesses its value and offers you money in exchange for it. They keep it in their possession until you can pay off the loan, unless, of course, you’re unable to pay it off within the time agreed upon.
This system is popular because it’s accessible to practically anyone. It works for smaller loans, instances wherein you really just need a bit of cash. It can be difficult though if the item you’re parting ways with has great sentimental value—an unquantifiable amount that can be insignificant to a third party. If the item is nothing special, though, it could be a way for you to dispose of it at a profit, right?
This particular loan is primarily a housing loan, so it might not apply to other financial needs and situations. But if you’re looking to build a house or do repairs on your existing home, then you might want to consider this.
The U.S. Department of Agriculture (USDA) actually offers various types of grants and loans, from assistance in opening a farm to housing programs.
Taking out a housing loan with the USDA can be a good idea, but it’s not for everybody. The government primarily offers these loans to invigorate rural areas, so metropolitan locations are not covered under this loan.
However, if you and your family are the types of people who would thrive in the countryside, this might be a good option for you. With its low interest and fixed rate, this might be your gateway to your dream country life.
Car title loan
If you’ve been working from home all year, then your parked car might be an idle asset you should consider tapping.
Car title loans are loans that use your car’s value—not necessarily your car—as collateral. You bring in the title of your car. Based on the vehicle’s value, you get an equivalent cash amount, which you will need to pay off following the agreed-upon terms.
The advantage is that you’re not pawning your car. It’s more like a mortgage on your car. And unlike other loans, you can borrow a larger amount because the value is based on your car’s. Sounds interesting, right?
No, it’s not what you think. This special kind of loan isn’t about giving a moneylender a pound of your flesh. What we mean by “blood” is family.
Borrowing money from a family member is either your first instinct or your very last. It depends on their financial situation and your relationship with them, but it is an option that might be worth considering.
The pros are that your family likely understands you better than any lending institution, but the cons are that, should you be unable to pay it off for any reason, you’ll be burning a very precious bridge.
Whichever loan you decide on taking out, weigh the advantages and disadvantages. It could be the most crucial decision you’ll ever make, and the right choice can mean the difference between ruin and success.