Take a minute. I know I promised to deliver some ideas on getting the money fast, and I will. But just give yourself a time-out. Remember that the interest rate you pay goes up based on two things: how fast you need the money and how bad your credit is.
If you can slow the process down, you’re going to come out ahead. Can you get a bridge loan from your family? Can you ask for a little more time from your creditors? Create some space for yourself. It’ll pay off.
2. Check your credit rating.
As I said, the lower your credit rating is, the higher the interest rate will be. It takes time to improve your credit rating, but you should take steps to do so anyway. It will help you down the line. The first step is to find out what your credit score is and what it means. Then, do everything you can to improve your credit score range.
If you find that your credit score is good, try to get down to a bank to get your loan. They’ll likely be the cheapest alternative. While you’re there, get an equity line of credit.
3. Skip the payday loan sites.
These guys make Don Corleone look like Mother Teresa. Borrowing money online can be dangerous. The interest they charge is astronomical. Forget it. Same goes for borrowing from your IRA – this is a bad idea and should be avoided at all costs. (Both these ideas go back to the speed issue. If you can slow down, you’ll save money.) You might also talk to family members about a loan, but before you do, think about it from their perspective. If nothing else, it will help you be more effective.
Note: No matter how badly you need this money try your best NOT to borrow IRA money. It’s super expensive and dangerous.
4. Check out peer-to-peer lending.
There are various sites that put people with money together with people who need money. I am most familiar with Lending Club (for more information, see my Lending Club review). Often, the rates they charge are lower than banks if you have good credit. These sites check your credit and various other indicators. The greater the risk they perceive in you, the higher the rate they’ll charge. Look around these sites. Pretend you are a lender and review how the other borrowers “sell themselves” to lenders. You want to put your best foot forward. Be honest about why you need the money and how you’re going to pay it back.
This is perhaps the most important step of all. Go back and look at why you got into this situation. Are you tracking your budget? What’s behind this crisis? What created your need to get money quickly? What could you have done differently to avoid this cash crisis? What are you going to do now to make sure this never happens again? I don’t want you to become an expert on how to borrow money. I want you to become a super-expert on how to never need to borrow money ever again.