Adam McCann, Financial Writer
You can borrow money from banks, credit unions and online lenders, as well as friends and family. There are also plenty of other places you could borrow money from that are not great options, like payday lenders, auto title lenders and pawnshops.
Each of these places where you can borrow money has unique advantages and disadvantages. Some have a lot more drawbacks than others, though, as you'll learn below.
Where You Can Borrow Money
Banks tend to offer the widest array of financial products, from personal loans to home equity loans to credit cards. They also tend to offer larger funding amounts than other types of lenders, and may allow you to apply in person with a credit specialist.
The downside is that banks tend to have stricter credit score requirements than credit unions or online lenders, and their maximum APRs can be high.
Some banks are better than others, though, so you can check out WalletHub's editors' picks for the best banks for personal loans to see some worthwhile options.
Credit unions tend to offer the same types of financial products as banks, but they are often more flexible when it comes to credit score requirements and their maximum APRs are low.
Unfortunately, credit unions may not have as much funding power as banks. They also require membership, which is usually limited to people who live, work or go to school in a certain area.
You may be able to find good credit unions in your area that you qualify for based on specific eligibility criteria. But you should also check out WalletHub's editors' picks for the best personal loans from credit unions that anyone can join.
There are tons of places to borrow money online, and they primarily offer personal loans, though they may also offer products like credit cards. Online lenders have the fastest funding timelines, but their maximum APRs tend to be quite high.
You can take a look at WalletHub's editors' picks for the best online loans to find some excellent options.
You may be able to borrow directly from the government in some cases, or from a company backed by a government enterprise like Fannie Mae. These loans are usually for very specific purposes, like home ownership.
Friends and family
You can ask to borrow money from someone you know, which comes with the added benefit of no hard pull of your credit. You'll likely get better terms than with a traditional lender, too. But you also risk hurting your relationship with that person if you have trouble with repayment.
You can borrow money against your next paycheck. But you shouldn't, because you can look forward to fees equivalent to a 400% APR, on average.
Auto title lenders
These lenders offer loans for 2 to 4 weeks, secured by your car. You can end up owing as much as 25% of what you borrow in interest.
Pawnshops let you borrow money using a valuable item as collateral. If you repay the loan with interest (usually 2% to 25% per month), you can get the item back. If not, the shop can sell it.
You can borrow money from your retirement funds before you hit retirement age, but it's not a good idea. If you don't pay it back within 5 years, you'll owe a 10% early withdrawal penalty to the IRS. Plus, you have to pay interest that goes into your account to make up for the time your money wasn't invested.
Final Thoughts: Deciding Where to Borrow Money
If you want continuous borrowing power, a credit card is usually the way to go. If you just have a one-time need for money, you should look into a personal loan.
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