How To Save Money When You Really Need to Borrow
We all know that borrowing money should be avoided if you can help it – but sometimes in life, unexpected expenses make that impossible. So if you do find that you need to finance something you haven’t been able to save up for, what is the best way to cover the cost? Well, make sure whatever you need to buy is part of a money-making deal. Not all borrowing methods are created equal, so making sure that you get the best deal for your personal circumstances is important. Before you turn to that payday loan company, make sure that you’re sourcing the lowest interest rate possible. One of the following channels may help:
If you or your spouse is an employee of the state, you may well have access to a state employees credit union. These organizations provide low-cost credit in the form of loans, debit or credit cards and even mortgages, typically at fairer rates that standard commercial banks. There is also usually the option to make repayments directly through your paycheck, which can make it easier to budget for.
0% Credit Cards
If you must use a credit card, make sure you’ve applied for one with a 0% interest rate over a fixed period – this way, as long as you repay the full amount before the end of the initial rate, then you will have paid no additional cost on top of what you borrowed, making this one of the best forms of lending. The pitfalls are considerable though – fail to repay in the 0% interest period, and rates tend to jump to fairly high amounts, so budget carefully to make sure that you can pay it back promptly. Also, if you don’t have a strong credit rating, the cards that qualify may not be extended to you, so make sure to check your score before applying. Some cards will also give you the benefit of earning loyalty points on top!
If you need to borrow a large amount of money, your best route may be a secured loan, which typically offers a lower rate than unsecured methods of borrowing such as credit cards, against bigger sums. In fact, if you act strategically and switch over to a lower-rate mortgage it can even end up not costing you any more money. Compare remortgage deals online to see if you can release money in the value of your property. If you drop the rate you’re on at the same time, you could even end up paying less overall, while releasing the cash you need now. Check before switching that you won’t be subject to any penalty fees from your lender, and take into account any mortgage arrangement fees related to the deal you are considering.
One of the best ways to find money is actually to borrow from family – but make sure you play by strict rules. Consider a written agreement to keep things professional, and always agree on dates and terms for repayment in advance, and stick to them – there’s nothing worse than damaging a strong relationship over money. If you can trust yourself to behave well, and you have a willing relation with some cash to spare, make the arrangement.