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Alternatives to Taking Out A Personal Loan

If you’re strapped for cash, you may be on the hunt for a way to get your finances back on track. Many people will take out personal loans to deal with financial challenges, like fixing a damaged car or paying for family-related expenses. However, before you take out a personal loan, it’s worth looking into alternatives. Personal loans can be expensive in the long run, as you’ll have to pay them back with interest, and they could negatively affect your credit score. Here are some alternatives to taking out a personal loan.

Credit Cards

If you already have a credit card open, it may be easier to use that for financial support than taking out a loan. If you’ve been good with your credit card payments in the past, you can request a credit limit increase from your financial institution. Some credit card companies will also let you open a card with no or little interest for a limited period of time. If you think you can pay the money back quickly, this could be a good option. However, you’ll need to be aware of how this can affect your credit score.

Pay Advance

If you work for an independent business, you may be able to ask for an advance on your paycheck. This is a good option if your employer tends to be flexible. If the only thing that is holding you back is a paycheck you are waiting on, then it’s worth asking to see what your options are.

Loans from Family or Friends

If you have close family or friends that are financially stable, they may be willing to loan you some money to help you get through a rough time. Borrowing money from loved ones is always preferable to borrowing from the bank, because it won’t affect your credit and you can negotiate payback terms.

Local Welfare Services

If you’re struggling financially due to an injury, illness, natural disaster, or other unforeseen circumstances, check to see if your local government offers support for people in your situation. You might be surprised by the type of support you qualify for.