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  • Personal loans are often reserved for those with the best credit scores, but there are other options for borrowing money if necessary.
  • Using a credit card, get an alternative payday loan from a checkout, or borrowing from family or friends are all options if you are unable to get money through a personal loan.
  • These options are not perfect: Credit cards can have high interest rates, and getting family loans can be risky. Use them after researching your personal loan options and using up your emergency fund.
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If you’re trying to make ends meet, To borrow money through a personal loan might not be an option.

A personal loan is not easy to obtain. They are often only available to those who have the best credit scores and good credit history and they are unsecured, which means there is no collateral available for banks to use to collect money if you stop paying. If you have a bad credit score or a debt to income ratio, you might find it difficult to get a loan.

This does not mean that they are completely irrelevant. Consider shopping around for different lenders before deciding that a personal loan won’t work, and tap into emergency savings before getting a loan. If you’ve been looking for a personal loan to cover your debts and can’t find one, here are three alternative options.

1. Alternative payday loan from a credit union

Payday loans are not good for borrowers. They often have incredibly high interest rates – the typical payday loan has an interest rate of over 400%, according to the Consumer Financial Protection Bureau.

Alternative payday loans, however, are a better option for a small loan. Offered through

credit unions
These loans have a maximum interest rate of 28%, lower than some personal loan options. The amount available generally ranges from $ 200 to $ 1,000. Alternative payday loans have an application fee capped at $ 20 and loan terms ranging from one to six months, depending on the National Administration of Credit Unions.

These alternative loans are an option for anyone who needs a small amount of money quickly. Although they are only available to members of credit unions, membership in a credit union – which often has membership requirements, such as residing in a certain area – is generally very accessible. These loans are regulated by the National Credit Union Administration and are intended to help consumers avoid abusive lending practices among payday lenders.

2. A credit card

In typical circumstances, the best way to use a credit card is like a debit card: to spend only the money you have, so you never run into debt. However, if you really need the cash right away, credit cards allow you to borrow money in small amounts at a time and then pay it back. Be aware that they will be an even more expensive option than personal loans if you end up having a balance – your balance will accumulate interest each month, and that interest will compound as well.

The average credit card has an interest rate of 16.61%, according to data from the Federal Reserve. It should be noted that the interest rate a credit card offered varies depending on several factors including a person’s credit history. Interest rates can also change independently depending on the

preferential rate
that banks are responsible for borrowing.

If you decide to cover your expenses with a credit card, look for a card with the lowest possible APR – the lowest cost of borrowing. Ideally, you should pay off your balance in full each month. If you know you won’t be able to do this, consider a card with an introductory APR of 0%, which will not charge interest during an introductory period (but will resume charging interest after that period has passed).

3. Borrow from family or friends

This option can be tricky, but it could be an option for anyone who has friends or family members ready to give them a loan. Borrow with family or friends should really be a last resort, writes Luke Landes, personal finance blogger and author of Consumerism Commentary. And, this option is not without risks – it could hurt relationships writes Catherine Fredman for Consumer Reports.

There are rules for taking this approach the right way. Financial Planner Mary Beth Storjohann previously told Tanza Loudenback of Business Insider that she suggests making a written plan. “Put the parameters in place: time frame, interest rate and when payments are due,” she says. Storjohann suggests charging interest on loans to help empower the borrower and provide a small incentive for the lender.

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