Learn How To Borrow Money In Times Of Need With This Guide (2023)

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Whether you’re facing unexpected expenses, recently lost your job or need extra cash for an upcoming trip or project, you may be wondering if borrowing money is a solution. Luckily, there are a variety of lenders and financial products that can be tailored to meet everyone’s unique borrowing needs.

We’ll walk you through where you can borrow money as well as the different options, like personal loans, home equity loans and 0% introductory rate credit cards.

Knowing When to Borrow Money

The best time to borrow money depends largely on what you need the funds for, the type of loan and whether it’s secured or unsecured. There are also a few factors you should always consider when preparing to borrow money. It may be a good time to borrow money if:

  • You have the financial resources to make monthly payments
  • You have a budget in place to manage your finances moving forward
  • Interest rates are low
  • Your credit score is at least 670, although borrowers with lower scores can still qualify
  • You’re willing to possibly pledge your home or other assets as collateral

5 Places to Borrow Money

If you need funds to pay for emergency expenses, want to finance a home improvement project or just want a buffer to cover unexpected bills, there are a number of places to borrow money.

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Traditional banks are probably the first place you think of when searching for a loan or line of credit. Beyond savings and checking accounts, these institutions often offer customers a wide range of products like mortgages, personal loans, credit cards and retirement accounts. This selection can make your bank a convenient and flexible way to borrow money. That said, annual percentage rates (APRs) and loan terms may be less favorable compared to other lenders.

Credit Unions

Credit unions are member-owned financial institutions that are committed to serving their communities through competitive rates. Due to their community-based structure and ethos, these institutions may also have less stringent lending standards, making it easier to borrow money if you don’t have stellar credit.

Credit union personal loans also can be a more affordable way to borrow money because federal credit unions cap APRs at 18% for most loans. If you’re not already a member of a credit union, look into local options and contact them to learn more about borrowing opportunities.

Online Lenders

Online lenders are becoming increasingly popular because of their quick prequalification and streamlined application processes. This makes them a popular choice for people who need to borrow money now.

These lenders often feature personal loans with APRs between 3% and 36%, but this varies depending on the platform and the borrower. Online lending is a great option if you’re looking for a personal loan, but there are also a number of online mortgage lenders that can simplify the process of financing—or refinancing—your home.

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Friends and Family

Borrowing from friends and family may not be your first choice, but if you have a low credit score—or no credit history at all—it might be your lowest cost (or only) option. What’s more, even if you have a good score, borrowing from friends or family you trust can be a great way to get a lower interest loan while paying that interest to someone you know, rather than a bank.

401(k) Plans

A 401(k) is an employer-sponsored retirement account into which employees can make tax-deductible contributions from their salary, up to an annual limit. Some employers also match a portion of contributions. Plan administrators typically offer employees a number of investment options, often including mutual funds and index funds. 401(k) distributions can begin at age 59 ½, and most early withdrawals come with a tax penalty equal to 10% of the withdrawal amount.

6 Ways to Borrow Money

Just as there are many places to borrow money, there are also a number of ways. That said, the best option will depend on how much you need to borrow, whether you’re willing to pledge collateral, your creditworthiness and other factors. Familiarize yourself with the below borrowing options before making a choice.

Personal Loan

Personal loans can provide funds for everything from travel expenses to emergency auto repairs and home improvement costs; however, you typically can’t use them for higher education expenses and to purchase a home. Traditional banks, credit unions, online lenders and peer-to-peer lending platforms offer these money loans. Terms typically range from two to seven years with interest rates from 3% to around 36% and limits between $250 to $100,000.

This borrowing option is extremely flexible because you can use the funds for a range of purposes—just check with the lender ahead of time to confirm if it permits your use. That said, personal loans are usually unsecured so borrowers need a credit score of at least 610 or 640 to qualify. However, applicants with higher scores will benefit from more favorable rates.

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Some lenders let you prequalify before applying for a personal loan, which lets you see the interest rates you would receive based on your creditworthiness. Prequalifying is a handy way to shop and compare different lenders to find the best option for you.

0% APR Credit Card

Credit cards are a popular way to borrow money because the provider only charges you interest on your outstanding balance each month—not the total credit limit. Still, credit card APRs are often higher than those available with secured borrowing options and even many unsecured personal loans.

However, you can avoid interest accrual if you choose a card with a 0% introductory rate or pay off your balance every month. A 0% APR credit card is one that has no-interest financing on purchases or balance transfers for a set period of time. The 0% period typically ranges from 12 to 21 months, after which cardholders are subject to interest rates based on their creditworthiness.

When choosing the 0% card that fits your needs, consider the length of the introductory period, the APR once that period is over and whether you need it for a balance transfer or new purchases. If you plan to transfer a balance, find out if there are any fees associated with transfers; also consider a balance transfer credit card.

401(k) Loan

If you have a robust 401(k) and need to access cash quickly, a 401(k) loan may be a feasible option. This type of loan involves borrowing against the balance of your 401(k), and you can use funds in any way that your plan permits. Keep in mind, however, that if you don’t pay back the loan within five years, the IRS will treat it as a distribution; you’ll have to cover taxes and a tax penalty equal to 10% of the amount you borrowed.

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If you leave your job before you pay off the loan, you have until the tax-return-filing due date for that tax year, including any extensions, to repay the full balance or to roll it over into another eligible retirement account. For example, let’s say you leave your job in February 2021 and receive no tax extensions. You have until April 15, 2022 to repay or rollover your 401(k) loan amount.

Personal Line of Credit

A personal line of credit lets a borrower access funds up to a certain limit on an as-needed basis. Typically available from traditional and online lenders, interest rates—with most at 10% APR or higher—are variable and are typically higher than personal loans. Before you apply for a personal line of credit, determine your credit score and prequalify with a number of lenders to find the most competitive terms available.

Home Equity Loan and Home Equity Line of Credit (HELOC)

Home equity loans and home equity lines of credit (HELOCs) are financing options that a borrower’s home equity secures. Because this type of financing is secured, interest rates are typically lower than other options. Home equity loans have fixed interest rates that average around 5%. HELOCs, on the other hand, have variable rates that typically start around prime plus 2% (approximately 5.25%).

In the case of a home equity loan, funds are dispersed in a single lump sum and the borrower is responsible for paying interest on the entire amount from day one. With a HELOC, lenders approve borrowers for a certain amount, which they can draw against on an as-needed basis; interest only accrues on what the borrower uses—the outstanding balance. To obtain a HELOC or home equity loan, contact your mortgage lender to evaluate your options.

Gift or Loan From Family or Friends

Depending on how much you need to borrow, a gift or loan from friends or family may be a good fit. However, if you choose to borrow from friends or family, consider a few tips before accepting:

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  • Ask someone you trust and with whom you’ll feel comfortable discussing finances
  • Agree to the loan term, interest rate and payment schedule
  • Determine how payments should be made each month—e.g., via check or bank transfer
  • Get the agreement in writing so everyone understands the terms of the loan
  • Create a loan amortization schedule that spells out the required payments
  • Don’t be offended if someone declines to lend you money—they may not feel comfortable doing so, and that’s OK

How to Borrow Money With Bad Credit

Borrowing money with bad credit can be a challenge, but it isn’t impossible. However, because borrowers with low credit scores present more of a risk to lenders, they often face less favorable lending terms—like high interest rates and lower loan amounts. What’s more, depending on the lender and type of loan or credit card, a prospective borrower with bad credit may not qualify at all.

If you need to get a personal loan with bad credit, contact your local credit union to see if you’ll qualify. Some online lenders also specialize in loans for bad credit, so research all of your options before committing to terms.

How to Manage Borrowed Money Responsibly

Whether you’re borrowing money from a lender or friend, it’s important to make timely payments—even if they won’t be reported to credit bureaus. To manage the money you borrow responsibly, follow these guidelines:

  • Don’t borrow more than you can comfortably repay
  • Commit to making timely payments each month
  • If you’re struggling to make payments, take a close look at your budget and evaluate which expenses you can reduce or eliminate
  • Let your lender know if you anticipate making a late payment or are otherwise struggling to meet loan obligations


What are the 4 things you need to consider when preparing to borrow money? ›

4 Things You Must Do Before You Borrow Money
  • Make sure you understand the terms of your loan. Before you borrow, you need to know: ...
  • Determine how much you really need to borrow. ...
  • Work the payments into your monthly budget. ...
  • Compare different lenders.
Sep 21, 2019

What are 5 ways to borrow money? ›

  • Banks.
  • Credit Unions.
  • Peer-to-Peer Lending (P2P)
  • 401(k) Plans.
  • Credit Cards.
  • Margin Accounts.
  • Public Agencies.
  • Finance Companies.

Do Cashapp let you borrow money? ›

Cash App Borrow is a type of short-term loan offered through the Cash App platform. This is how it works: If you're eligible you can take out a loan from $20 to $200. You then have four weeks to pay back the loaned amount plus a 5% flat fee.

How to get money instantly? ›

Once those subside, you'll find there are ways to get your hands on quick cash, without falling prey to scams.
  1. Sell spare electronics. ...
  2. Sell your gift cards. ...
  3. Pawn something. ...
  4. Work today for fast cash today. ...
  5. Seek community loans and assistance. ...
  6. Ask for forbearance on bills. ...
  7. Request a payroll advance.
Dec 14, 2022

How can I get cash today? ›

16 ways to find fast cash
  1. Sell something. If you have anything sitting around your house collecting dust, then you could turn it into cash. ...
  2. Pawn something. ...
  3. Sell unused gift cards. ...
  4. Access your paycheck earlier. ...
  5. Take on a freelance gig. ...
  6. Pet sit. ...
  7. Babysit. ...
  8. Ask for a loan from a family member or friend.
Nov 9, 2022

What are the 3 C's of borrowing? ›

Character, capital (or collateral), and capacity make up the three C's of credit. Credit history, sufficient finances for repayment, and collateral are all factors in establishing credit. A person's character is based on their ability to pay their bills on time, which includes their past payments.

What are the five C's of borrowing? ›

What are the 5 Cs of credit? Lenders score your loan application by these 5 Cs—Capacity, Capital, Collateral, Conditions and Character. Learn what they are so you can improve your eligibility when you present yourself to lenders.

What are the 3 C's for a loan? ›

Character, Capacity and Capital.

How can I borrow money fast with no credit? ›

Below, we'll talk about how these options can help you get a loan with no credit:
  1. Online lenders.
  2. Banks and credit unions.
  3. Cosigner.
  4. Collateral (secured loans)
  5. Paycheck advances.
  6. Personal loans for bad credit.
  7. Credit-builder loans.
  8. Family and friends.

Who can I borrow money from fast? ›

If you need fast cash, see our top picks below for lenders that say they may be able to get you money quickly.
  • Wells Fargo: Good for existing customers.
  • Marcus by Goldman Sachs: Good for people with strong credit.
  • Avant: Good for people with less-than-perfect credit.
  • Earnin: Good for small cash advances.
Dec 19, 2022

How can I get money without borrowing? ›

How to Raise Money for a Business Without a Loan
  1. 1 Savings.
  2. 2 Entering Contests.
  3. 3 Crowdfunding.
  4. 4 Product Presale.
  5. 5 Family and Friends Lending.
  6. 6 Private Investors.
  7. 7 Angel Investors.
  8. 8 Venture Capitalists.
Aug 11, 2021

How to borrow money on PayPal? ›

The process is easy:
  1. Select your loan amount. ...
  2. Choose the percentage of your PayPal sales that will go toward repaying your loan and fee.
  3. If approved, receive the funds in your PayPal account within minutes.

What are the 3 main methods of borrowing in the short term? ›

The main sources of short-term financing are (1) trade credit, (2) commercial bank loans, (3) commercial paper, a specific type of promissory note, and (4) secured loans.

Why do rich people borrow money? ›

When rich people borrow, they do so because they want to improve their overall financial situation, and they can do that by leveraging the money lenders provide. You can do the same. For example, a wealthy person might take out a loan to buy an investment property that produces consistent income and goes up in price.

What does C mean on credit report? ›

C = Current. 1 = 30 days past due date. 2 = 60 days past due date. 3 = 90 days past due date. 4 = 120 days past due date.

What number is considered a good credit score? ›

Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.

What are the 6 types of borrowing? ›

  • Personal loans.
  • Home credit (Doorstep loans)
  • Payday loans.
  • Credit brokers.
  • Student loans.
  • View all.

What are the principles of good lending? ›

The lending process in any banking institutions is based on some core principles such as safety, liquidity, diversity, stability and profitability.

What is a 303k loan? ›

November 07, 2022. Share: A boon to DIYers and home project enthusiasts, an FHA 203(k) loan – also known as a mortgage rehab loan, renovation loan, or Section 203(k) loan – can be used to fund both a home's purchase and renovations under a single mortgage.

What habit lowers your credit score? ›

Paying your bills late

If you get into the habit of paying bills after the due date, this is going to hurt your credit score a lot. Payment history is the most important criteria when your credit score is set and if you are more than 30 days late, this will be reflected on your payment record.

What is the Truth and lending Act? ›

The Truth in Lending Act (TILA) protects you against inaccurate and unfair credit billing and credit card practices. It requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loans.

How can I get a instant loan in 5 minutes? ›

The best way to get an instant loan in 5 minutes is to borrow from a friend or family member since they can give you cash or use an electronic transfer service to send you money immediately. No reputable companies will send funds to you within minutes or even 1 hour after you apply.

Which type of loan does not require a credit check? ›

For example, payday loans and high-rate installment loans might not require a credit check. Or, if you own a vehicle or valuable property, you may be able to get an auto title loan or pawn loan without a credit check.

Can you get a $2,000 personal loan with no credit? ›

Yes, you can get a $2,000 loan with no credit if absolutely need be. However, if a lender is willing to work with you, they will most likely charge you much higher interest rates and an origination fee than if you had some established credit history.

Who will give a loan to anyone? ›

  • Banks. Taking out a personal loan from a bank can seem like an attractive option. ...
  • Credit unions. A personal loan from a credit union might be a better option than a personal loan from a bank. ...
  • Online lenders. ...
  • Cash advances. ...
  • Cash advance from credit card. ...
  • Buy-now, pay-later apps. ...
  • 401(k) retirement account. ...
  • Family and friends.
Apr 29, 2022

What app can I borrow $500 from? ›

Exprebucs app was designed to make borrowing online as soon as possible for you. You can get a cash advance of between $100 and $500 by starting with our short application for loan tool. Payday loans are short-term loans for small amounts of money.

What is the hardship loan? ›

A hardship loan is a type of financing designed to help those in a financial crisis caused by an emergency expense or a shortage of earnings. You can use a hardship loan to cover anything unforeseen, like a medical bill or car repair, or to pay for monthly basics, such as food and rent.

How do I borrow 200 from Cash App? ›

How To Use Cash App Borrow
  1. Open the app and sign in.
  2. Click on your account balance.
  3. Click on 'Borrow'
  4. Tap on 'Unlock'
  5. Choose your repayment option.
  6. Agree and accept.

How do you borrow money from a cash advance? ›

How does a payday loan or cash advance loan work?
  1. You give the lender a check for the amount of money you want to borrow – plus a fee.
  2. The lender keeps your check and gives you cash – less the fee they charge.
  3. On your next payday, you have to pay the lender in cash. You owe the amount you borrowed plus the fee.

Does PayPal give cash advances? ›

Although they're in the money business, PayPal doesn't offer cash advances on your paycheck. At least not yet. The company hasn't announced any official plans about offering a cash advance service in the future so don't get scammed by anyone telling you otherwise.

How can I borrow money without a loan? ›

Using a credit card, getting a payday alternative loan from a credit union, or borrowing from family or friends are all options if you're not able to get cash through a personal loan. These options aren't perfect: Credit cards can have high interest rates, and getting loans from family can be risky.

Where can I borrow money online instantly? ›

With the advent of digital means and technological advancements, you can borrow money online in Nigeria using quick, easy, and convenient websites.
Top 12 Websites That Give Quick Loans in Nigeria
  • PennyLender. ...
  • Renmoney. ...
  • GRoFIN. ...
  • Alat-Wema. ...
  • Rosabon Finance. ...
  • FINT. ...
  • Lydia.Co. ...
Dec 23, 2022

How do you borrow money from emergency? ›

Emergency loans can come in the form of unsecured personal loans, credit card cash advances, payday loans or even pawn shop loans. Emergency loan funds can be deposited directly into your bank account — often within a business day or two of approval, depending on the lender and the details of the loan application.

Can I borrow money without proof of income? ›

It is possible to get a personal loan with no income verification. However, it can be challenging to qualify for one since most lenders require a stable income to secure a personal loan. Additionally, it may not be a wise decision to put your financial health at risk if you can't afford to repay the loan.

Which app can borrow me urgent money? ›

Carbon. Formally known as PayLater, Carbon is an easy-to-use and entirely online lending platform that provides short-term loans to individuals and small businesses in Nigeria to help cover unexpected expenses or urgent cash needs. With Carbon, you can instantly access up to a 1,000,000 Naira loan without collateral.

How can I get a personal loan immediately in one hour? ›

Money Zap offers 1-hour loans with no credit check. Get a loan in less than an hour, receive cash in the account as soon as 24 hours.


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