From time to, time, every person actually needs to borrow money whether to start a business, buy a new car or even erect a new backyard deck. But what is the easiest way of borrowing money? What are the best sources of financing? Before borrowing money in any financial institutions, you need to research your options thoroughly because there are some financial institutions that can lend money to you easily but with very high interest rates. Here we are going to outline some of the popular and best sources of funding as well as the cons and pros associated with each.
1. Credit unions.
Credit unions are considered to be cooperative institutions that are controlled by its members or those people who are using its services. A credit union normally tends to include members of a particular organization, group or community and in order to borrow, one must be a member of the union. Some credit unions are nonprofit enterprises and in that case, it means that they can actually lend money to their members at favorable rates than banks .Furthermore, certain fees like lending application fee may actually be cheaper and customers typically do not get nickel- and – Dimed with the transaction fee they way some banks do.
On the other hand, credit unions only have a limited number of ATMs in their area where they normally operate. Also in some cases, a credit union may carry limited insurance or may be completely uninsured and that my cause problem if the credit union folds.
Banks normally offer a variety of loans including construction loans, personal loans, mortgage loans and many other loan products depending on the customers’ needs. Banks are actually a traditional source of funding for those individuals who want to purchase a car or a house or those who are looking to refinance an existing g loan at rates that is more favorable. Many people find it easy to do business with their bank. This is because; they already have an account there. In addition, there are personnel at the local branch who are always ready help with paperwork and also answer questions. ATMs are also available everywhere for quick money withdrawals.
On the other hand, hefty bank fees can apply when getting finance from a bank. Some banks are also very notorious in charge ATM transaction fees, check fees, loan application fees, minimum fees, maintenance fees among other charges.
3. Credit cards.
Credit cards can actually be a great source of loans but can also cause undue hardship to those individuals who are actually not aware of the costs. They are usually not considered to be a long term source of financing but is can be a good source of funding for those individuals who need quick money and intend to repay that borrowed amount in short order. If you already have a card, there is no application fee.
On the other hand, If credit card balance is carried over, the interest rate can be very exorbitant .For those who need longer term financing such as mortgage loan are disadvantaged because credit card companies don’t offer long term loans. Also borrowing too much money through your credit card can limit or prevent you from getting a loan from other financial institutions.