In a Financial Pinch? Here are Some of The Cheapest Ways to Borrow Money
Have you found yourself in a bit of financial trouble lately?
You might’ve lost your job, or maybe your bills have skyrocketed and you just can’t cover them all.
Whatever the situation, you might be forced to borrow money to pay for everything you need without having to do something drastic.
Unfortunately, borrowing money can come with a high price tag, potentially leaving you in an even bigger pinch. But there are more affordable ways to borrow money. We’ve broken down some of your options, so you can make the best decision for your needs.
A Quick Note on Payday Loans
If you still have an income, payday loans can be tempting because of their immediacy. You fill out an application with some personal information and proof of income. If you’re approved, you get money. Easy enough.
But depending on where you live, the interest rates and fees associated with payday loans could be 500% or more, which could leave you with thousands of dollars owed on top of the few hundred bucks you originally borrowed.
Payday loans have the potential to send you into a cycle of debt, so if you can avoid them and take advantage of other options, you should.
Take a look at some of these alternatives:
1. Low- to No-Interest Credit Cards
Ah, credit cards. When your bank account is running low, they can be a life-saver if you need to buy groceries or pay your electric bill.
But you have to make sure you can pay them off at the end of the billing period. If not, you could get hit with some pretty high interest rates (APR). The average interest rate in 2020 so far, according to the Federal Reserve, is around 16%. That’s not something you want to take on, if you can avoid it.
That being said, there are credit cards that offer introductory periods with low-to-zero APR — some for up to 18 months. If your credit is good, and you can still make monthly minimum payments, this is a free (or cheaper) way to borrow money.
Before making a move, you’ll want to compare your options. For each card, take a look at its APR, rewards, fees and any fine print.
2. Personal Loans
If you’re not able to pay off your credit card fully each month, a personal loan could have better rates. This can be a good choice for people who need to borrow more than a few hundred dollars.
Not sure where to start? A website called AmOne can help you compare your options and get you hooked up with a more affordable loan.
If you need to borrow up to $50,000, AmOne will match you with a low-interest loan. It takes all of two minutes to see your options — no need to stand in line or call your bank.
The interest rates are pretty good — they start at 2.49%.
AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.
If you’re worried you won’t qualify, it’s free to see if you qualify online. It takes just two minutes.
3. Payday-Loan-Alternative Apps
If you need to borrow a couple hundred dollars to get you to your next paycheck, there are some apps that just might be able to help you out.
Brigit, for example, takes little time to download, and it doesn’t require a credit check. It lets you borrow up to $250, which could be what you need to avoid a pesky $35 overdraft fee. There’s no interest, though you’ll pay a $9.99 monthly fee.
There are also online banks that’ll help you out in a pinch. For instance, Chime has a feature called SpotMe®, which allows you to overdraw on your debit card purchases by up to $100 without fees.
You’ll have to qualify to use this, but it’s worth looking into if your checking account balance is getting low.
So before you do something drastic to get out of that financial pinch, do your research to figure out the best way for you to borrow money and ease some of your money stress.
Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A. pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. The secured Chime Visa® Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A. pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your Card for its issuing bank.
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1 Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
2 Out-of-network ATM withdrawal and over the counter advance fees may apply except at FCTI® ATMs in a 7-Eleven® or Speedway, or any Allpoint® or Visa® Plus Alliance ATM participating in the Allpoint network.
3 SpotMe® on Credit is an optional, no interest/no fee overdraft line of credit tied to the Secured Deposit Account. SpotMe on Debit is an optional, no fee service attached to your Chime Checking Account (individually or collectively, “SpotMe”). Eligibility for SpotMe requires $200 or more in qualifying direct deposits to your Chime Checking Account each month.
Qualifying members will be allowed to overdraw their Chime Checking Account and/or their Secured Deposit Account up to $20 in total, but may be later eligible for a higher combined limit of up to $200 or more based on member’s Chime account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your SpotMe Limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your SpotMe Limit. SpotMe for Credit and SpotMe on Debit share a single SpotMe limit. Your SpotMe Limit may change at any time, at Chime or its banking partners’ discretion. Although there are no overdraft fees, there may be out-of-network or third-party fees associated with ATM transactions or OTC cash withdrawal fees at retailers. SpotMe won’t cover non-card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. SpotMe Terms and Conditions.
4 With a qualifying direct deposit, earn 1.5% cash back on eligible secured Chime Visa® Credit Card purchases. Please refer to the Secured Chime Visa® Credit Card – Cash Rewards Program Addendum for details and more information on rotating cash back categories.
5 On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.
6 Out-of-network ATM withdrawal and OTC advance fees may apply. View The Bancorp agreement or Stride agreement for details; see back of card for issuer.
7 Money added to Chime Card™ will be held in a secured deposit account as collateral for your Chime Card, and you can spend up to this amount. You can use money deposited in your Secured Deposit Account to pay off your charges at the end of every month.
8 You must notify your financial institution immediately of any unauthorized use. For specific restrictions, limitations and other details, please consult your issuer.
9 To be eligible for Chime+™ status, you must receive a qualifying direct deposit to your Chime Checking Account in the preceding 34 days. Certain products marketed as Chime+ benefits have additional eligibility requirements. While some Chime+ benefits may have associated fees, none of these fees are mandatory to access Chime+ benefits or to maintain Chime+ status. See Chime+ Terms and Conditions for details.
10 To be eligible for MyPay, you must receive qualifying direct deposits to your Chime Checking Account in the preceding 36 days as set forth in the MyPay Agreement. A qualifying direct deposit is a deposit from an employer, payroll provider, gig economy payer, government benefits payer, or other permitted source of income by Automated Clearing House (“ACH”) or Original Credit Transaction (“OCT”). Your MyPay Credit Limit and Maximum Available Advance may change at any time. MyPay is a line of credit and available limits are based on estimated income and risk-based criteria. Eligible members may be offered a $20 – $500 Credit Limit per pay period. Your Credit Limit and Maximum Available Advance will be displayed to you within the Chime app. MyPay is currently only available to eligible Chime members in certain states. Other restrictions may apply. See Bancorp MyPay Agreement or Stride MyPay Agreement for details.
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12 To apply for a Chime Card, you must also open a Chime Checking Account.
13 Chime Visa® Credit Card holders – Deposits and debit refunds go to your Checking Account, then transfer to your Chime Card Secured Deposit Account – other than Chime Card cash deposits at retailers, which go to your Chime Card Account, then transfer to your Secured Deposit Account. Funds are moved from your Secured Deposit Account to your Checking Account to facilitate outbound transfers and debit purchases. Your Available balance is the money you can spend with your Chime Card or Checking Account. See account agreements and statements for details.
14 Chime will report the following activities, as applicable, to TransUnion®, Experian®, and Equifax®: amount past due; payment status of the last paid-off balance; how long you’ve had your card; current statement balance; last balance payment date; and highest balance before paying it off.
