Monthly Archives: September 2009

Borrowers have multiple cash opportunities for borrowing online

Numerous avenues to borrow money in an emergency financial situation are available for borrowers who do their homework upfront and research all of their options. The finance and loan industry has greatly reduced borrowing opportunities for millions of consumers. Those in need of emergency cash certainly have fewer options than in years past. Today, options for borrowing money online remain centered on four types of lending programs. Compare payday loans or cash advance loans are available in most, but not all states. Personal and signature based loans, credit card cash advance loans and a newer phenomenon called social lending clubs. The options to borrow money online can provide an easy and quick alternative to addressing your emergency cash needs and the various loan options each have their advantages and disadvantages for borrowing money.

In reviewing borrowing options, the loans that tend to offer the best rates are considered signature loans. These are loans that are offered typically through a bank or credit union that allow a customer to borrow between $500 to $25,000. These loans tend to take over 48 hrs to process and the underwriting process generally includes a thorough review of the borrowers credit profile. Signature loans are often based on a borrowers employment status and credit profile, but have the advantage of lower interest rates and more favorable payment terms to help borrowers achieve a manageable payment.

Social lending sites offer personal loans to borrowers, typically in amounts of $1000 up to $25,000. The peer based lending programs have been available for at least five years and are becoming increasingly popular as the finance landscape changes. The ability to borrow money is also based on credit and income, but the underwriting and approval process is not as black and white as a typical lender. These loans are available as investors pool their money into larger groups at a requested rate of return. The more potential risk, typically leads to higher interest rates being offered to the borrowers. Investors help to minimize their risks by spreading their loans across multiple borrowers, in some cases with as little as $25 in principle exposure.

Credit card cash advance loans have been available to borrowers for many years. Borrowing against ones credit card is often an easy alternative to obtaining cash in a hurry. The challenge is credit card companies restrict the amount of money available on a cash advance and the process of applying for new credit cards online can still take up to 7 days for full approval and access to a new credit card. Rates on cash advances for credit cards tend to be over ten percent with most lenders.

Payday and cash advance loans are often the last avenue a borrower will pursue to obtain emergency financing. These loans which are available in most states often are processed without a credit report, benefiting borrowers with little or poor credit history. The loans are generally offered to borrowers who pledge their future paychecks as collateral for the new loan. Payday loans are a convenient way to access cash for an emergency, but the disadvantage is they often have interest rates well above ten percent and can quickly become habit forming to consumers who are living paycheck to paycheck. Payday loan lenders do not offer universal interest rates, so shopping around can often help you save on rates and fees and make the process of obtaining a new loan more financially sound.