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What are the good and bad ways to borrow money?

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People need money when they are in financial problems. What are some good and bad ways to borrow money?




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Sub: #1 posted on Fri, 08/03/2012 - 10:35

iam_robin iam_robin

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There are quite a few ways to come up with capital in not a really long amount of time. The best is always to borrow from a friend or family member. The reasoning here is these people will be more willing to work with you if you run into hard times.

Without knowing the situation the next place I would look would be a loan against my 401k. Most plans that allow this have up to 5 year loans and they will automatically deduct it from your pay. This will allow you to beat the tax penalty as well as the withdrawal penalty. You will also pay yourself back interest. The only issue here is if you do lose your job. The loan is due immediately.

If these two are not available I would see if any assets were available to liquidate or could secure a loan against. Depending on of course what it is. Cars / Homes one must be a bit leery.

The absolute worst places to borrow money is to take a cash advance from your credit card or a pay day loan. Loans against your home, unless younger with a positive outlook, are a bit risky as well.

Of course last but not least any type of illegal activity, or immoral, is a strict no, no. No matter how easy it maybe.

Sub: #2 posted on Fri, 08/03/2012 - 21:40

Fph7203 Fph7203

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Sometimes we all need to borrow money. We run a little short here or there. It's inevitable. However, speaking from experience, there are good and bad ways to borrow money.

Let's get the bad out of the way. NEVER borrow more than you can afford to pay back. Don't take out loans if you do not need to. A loan may seem like the best way to get what you need taken care of, but can you afford the loan payments that come each month? This gets you into a vicious lending cycle.

If you can avoid it at all, please do not take credit limit increases on your credit cards. Again, may seem great that you have more money. However, that extra $1000 credit limit doesn't do much to helping you pay off your already maxed out or close to maxed out card. It gives you more money to spend and some people, like me, will spend it until it's gone.

One that is often overlooked is cash back. Don't write a check at the grocery store and get cash back. The grocery store is not a bank. That $3 box of cereal you just got with the $100 cash back just turned into a $103 box of cereal. If you haveve no money in your bank account, you won't have any when the check is presented and the late fees are assessed. That cereal now cost you at least $128.00.

Avoid borrowing money from friends. Sometimes, "I'll pay you back in a week" doesn't always happen due to extenuating circumstances. That week could turn into two, three, or even up to a month or two, or five or even a year. This puts a strain on the friendship and can go a long way to reducing the friend's trust in you.

And then we come to the devil known as payday loans. These are to be avoided at all costs. Sell your belongings before you even consider taking out a payday loan. You'll miss your stuff, but it will save you a lot of tears, stress, and anger. Also, if you get a payday loan, which you shouldn't, EVER, be prepared for your bank accounts to take a nosedive as the collectors cash your checks and present them multiple times, when you may not have the funds available. I cannot stress enough -- STAY AWAY FROM PAYDAY LOANS.

However, there are good ways to borrow money.

Family is there for you through everything. As much as you hate to do it, ask your family. Yes, they may yell at you or lecture you about being frivilous with money, but in the end, they will at least give you a little. Your parents do not want to see you starve, or kicked out of your house. They want to see you happy and healthy.

This is usually the only way to go when borrowing money. I learned this the hard way and am still paying for my mistakes. Yes, I have to pay back my dad for the $6000 he loaned me to get me out of a jam, but that is so much better than having to pay four credit cards, six payday loan companies, and two personal loans all at the same time. And, eventually, they get over it and you're back to being in their good graces.

Thank you for reading.

Sub: #3 posted on Mon, 08/06/2012 - 14:50

amgioia amgioia

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There are NO good ways to borrow money when having financial problems. Borrowing money should be the last resort if you're already having financial problems. Finding ways to reduce expenses and living within your means WILL help your financial situation in the long run.
Here are some good ways to borrow money if you REALLY need to borrow money:
-If you have good credit, apply for a personal loan through your bank or credit union.
-Borrow money from a relative or friend.
-Take out a loan against your 401k.(This should only be done if you have no other options).

DO NOT
-Take out payday loans, installment loans or collateral loans.
-Take out cash advances on your credit cards.

Sub: #4 posted on Mon, 08/06/2012 - 21:04

cagrl12 cagrl12

(Posts: 26 | Credits: )

I will answer in bullet form so I can say what I want without rambling.

BAD WAYS
1. NEVER from family unless you count it a "gift".
2. WITHOUT doing your homework re: options, interest.
3. FOR ANYTHING you do not absolutely HAVE to have.(if you are borrowing, you prob can't afford it)
4.Never without all proper documentation, ie: promissory note,terms of payback, copies for YOUR file to KEEP.
5. FROM your RETIREMENT account, EVER.
6. If you can at all possible just pay it up front.

GOOD WAYS
1. If you are financially stable, and are trying to create "credit".
2. You can at all possibly pay it back before interest accrues
3. You have done your homework have the best interest rate, etc.
4. If borrowing short term you already have the money to pay it back, or will within 30 days ,without dipping into savings, etc.
5. You have a good "feeling" about the amount, terms, etc. We should listen to those "gut" feelings-they are there to protect us.

Sub: #5 posted on Thu, 08/09/2012 - 10:47

alhollatz alhollatz

(Posts: 1 | Credits: )

Good ways to borrow money is the lowest amount of interest possible -- borrowing from family, friends if you don't have credit -- just make sure that you keep track of what you owe --

Bad ways to borrow money -- PAYDAY loans -- they charge high interest and are illegal in many states. Anything with high interest or if it seems "too good to be true" -- it usually is .

Sub: #6 posted on Wed, 08/15/2012 - 07:47

chrissyhen1 chrissyhen1

(Posts: 152 | Credits: )

A good way would be to have a yard sale. I recently had a yard sale and in five hours I made more than what I make in eight hours. Not only do you make extra cash you also clean your garage.
A bad way to get extra cash quick is to get a payday loan. It seems very tempting and it's quick but, the payments and interest last forever. The total amount borrowed seems it never goes down. Some of the payday loans are doubled in value.

Sub: #7 posted on Wed, 08/15/2012 - 20:05

avictoria1337 avictoria1337

(Posts: 1 | Credits: )

Well, the most obvious way for bad borrowing is the payday loan route. Not a good idea at all. This causes many heartaches and problems. A good way to borrow is through a bank, credit union, or finance company. Only ask to borrow what you absolutely need so that you do not put yourself in a bind.

Sub: #8 posted on Fri, 08/17/2012 - 05:10

bingonut bingonut

(Posts: 1433 | Credits: )

well knowing that we can pay it back .otherwise back in the same or wores way. financials have funny way of pokeing in the way .not have a job in ithis time and age is a big factor.i know that if pay your bills on time that you get to borrow more . something the i lack not cause that not intend too play but with four kids time has a funny way of changeing things.if someone could help as far as a little lead way or a leg up well you know .

Sub: #9 posted on Thu, 08/23/2012 - 03:12

v.machado0607 v.machado0607

(Posts: 1 | Credits: )

A great way to borrow money is to ask a family member or a close friend who you have a trusting relationship with. No interest, and less stress overall. It really should be with someone who trusts you and you will not screw over (because that will hurt the relationship). BUT if you do it right then there is no harm! It will be off the record and therefor won't mess with your credit standing.

A bad way to borrow money is, to first of all, borrow it when you can't pay it back! Borrowing from credit cards or banks I think is the worst since you will accrue interest charges. If there is a situation where you can't pay it back, you will hurt your credit. Nobody wants a bank or debt collection company ruining their lives!

Sub: #10 posted on Sat, 08/25/2012 - 06:56

michellemarie.dunleavy michellemarie.dunleavy

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