3 Ways to Borrow Money on a Low Income

If you have a low income, you may think that you’re unable to borrow a lot of money, if any at all, even though you may need it more than most people. Thankfully, though, there are several ways that you can effectively borrow the money that you need, regardless of how low your income is. Continue reading to learn more.

Get a Guarantor Loan

Guarantor loans are one of the more popular options for those on a low income who need to borrow money right away. Basically, someone close to you, such as a friend or a family member whom you can trust, will act as your guarantor, providing added security on the loan you take out.

Because this type of loan is unsecured, you don’t need to worry about placing one of your assets up as collateral. And if you’ve tried getting loans elsewhere only to have been turned down, a guarantor loan could be the way to go because the lender will look at your credit history, as well as the guarantor’s credit history, before determining your eligibility for the money.

Once you receive your money, you will need to make monthly payments to pay back the loan in its entirety before the end of the term for the loan. But in the event that you can’t make a monthly payment, your guarantor can step in and make the payments for you so that you can stay on track and not be penalised.

Seek Out Credit Unions

While payday loans may seem like a good idea, the truth is that a lot of people have a lot of difficulty getting them paid off in time, especially because of the extremely high interest rates that can make it nearly impossible to pay them back. As an alternative to payday loans, you can ask to borrow from a local credit union.

These institutions are usually able to offer you a loan at a lower interest rate, especially when compared to payday loans. And credit unions can also help you by offering a savings account that you can use.

Just be aware that, even though their rates are typically lower than payday loans, the rates will probably be higher than other banks in your area, but they are a great choice for those who have been denied loans elsewhere.

Talk to My Home Finance

My Home Finance will also offer you a loan that has a lower interest rate than payday lenders. The loan is basically deposited into your bank account and then the repayments are made as direct debits on a schedule.

Even though your options may seem limited when you have to borrow money while on a low income, the truth is that there are several alternatives to traditional loans out there. Seek these options out so that you can get the money that you need. Just make sure that you agree to terms that will allow you to easily pay the money back without being penalised and diving deeper into debt as a result.

Photo by Serge Bertasius Photography at freedigitalphotos.net

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