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Lenders: The Place To Go When You Need Money

Lenders are always ready and lined up to loan you money – for a price. Whether you’re in need a few hundred bucks to get by until your next payday or tens of thousands of dollars to start your own business, you will typically have no trouble finding a lending institution to answer the call. However, the question is: which lenders should you borrow from and what should you watch out for to protect yourself?

There different types of lenders out there, each with their own unique selling point and their own agendas. Here’s a snapshot:

The good old-fashioned bank. This is still the number-one place borrowers ... (more)

Lenders: The Place To Go When You Need Money

Lenders are always ready and lined up to loan you money – for a price. Whether you’re in need a few hundred bucks to get by until your next payday or tens of thousands of dollars to start your own business, you will typically have no trouble finding a lending institution to answer the call. However, the question is: which lenders should you borrow from and what should you watch out for to protect yourself?

There different types of lenders out there, each with their own unique selling point and their own agendas. Here’s a snapshot:

The good old-fashioned bank. This is still the number-one place borrowers turn to when in need of a loan. Even the largest banks in the country are working hard to offer competitive rates and services to compete with the smaller, more nimble lenders out there.

The online “branch-less” banks such as ING. With less overhead than a traditional lender, they can often offer better interest rates.

Credit unions. These are member-owned lending institutions. Because they are co-operatives, they can usually offer low interest rates and funnel any profits back into your community.

Payday Lenders. A very insidious and dangerous type of lender. These institutions prey on poorer, less-educated communities, offering loans with high interest rates to get people through until their next paycheck. They often falsely advertise themselves as a one-time solution to your cash-flow problems; in actually, they deliberately try to rope you into an endless cycle of borrowing, using one payday loan to pay back the previous one. It is never a good idea to borrow from this type of lender.

Pawn brokers. A very simple kind of lending. If you want to borrow money, you give the pawn broker an item of equal value (say a TV or your diamond ring) and if you can’t pay back the debt, they get to keep the item.

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