Unsecured Personal Loans Available from Several Sources

[Dec 4, 2009.]

 

Anyone who has been desperate to find money to keep a roof over their heads and food on the table knows how scary it can be. People who find themselves in this situation have often run out of options for finding more income and aren't sure where to turn. Borrowing a loan has certain risks, especially on a limited income. If necessary, there are several places someone can go to borrow money, but some of these options may lead to more financial problems.

Traditional Banks

Of course, the first place many people think of when seeking a loan is their local bank. While banks are still making personal loans to qualified borrowers, don't expect much if you have bad credit or a low income. Even people with good credit and healthy incomes are being denied personal loans by banks in this tough economy.

Personal Loans with Bad Credit

There are ads all over the place claiming that people with bad credit can get loans. But the fact of the matter is that many lenders are just not loaning money to people with bad credit. Borrowers with bad credit who somehow manage to get personal loans end up paying for it in the form of high interest rates.

Peer-2-Peer Loans

More people are turning to social lending sites to find the money they need. Peer-2-peer (P2P) sites allow borrowers to request money from either their friends or complete strangers. Because the loans are spread amongst many lenders, some people are willing to risk lending money to people they don't know. Generally, borrowers still need good credit to borrow money at these sites.

Payday Loan Stores

Payday loan stores, also known as cash advance stores, are a debt trap that should be avoided by nearly everyone. These lenders charge exorbitant rates of interest that can keep people in a never-ending cycle of debt. Payday lenders allow you to borrow a small personal loan against your next paycheck. But in many cases, borrowers are unable to pay back the loan and have to roll it over and pay more interest.

Fast Loans at Pawn Shops

Who hasn't seen a movie or TV show where someone takes a prized possession to a pawn shop in exchange for cash. Well, the troubled economy has led many Americans from all walks of life to turn to pawn shops for fast loans. The amount received in exchange for the items is usually a fraction of what they are actually worth, so generally, it's not worth it to pawn items unless you are truly desperate for cash.

 

About Author:

Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.