When and How to Borrow Money the Right Way

April 2, 2017

There is no shortage of people out there willing to lend you money. In 2017, borrowing capital isn’t the problem; it’s how much you pay for the privilege. In America, we live in an interesting financial time. It’s commonplace for people to be absolutely trashed financially speaking. It’s so commonplace, in fact, that the lending industry has created several classes of loans specifically for people with very poor credit and overall financial health.


It’s not uncommon to see loans issued at more than 100% annual interest to this group of borrowers. Many of these loans are advertised and offered to people with very little financial knowledge. These individuals may be encourage to look only at the amount of money they’ll be paying back each month, though this is far from the only relevant measure. When the interest is in the teens and twenties, as is common with credit card debt, or the thirties and above, as is common with no-credit auto loans and payday loans, this is the real measure of whether or not a loan is affordable.

Fortunately for people with less than sterling credit, there is so much competition in the lending industry today that costs are driven down for consumers. You just have to know where to look. For an easy guide, read the Best Online Personal Loans of 2017. We’ll go into greater detail in what follows.


If you have poor credit, it is in your best interests to wait on a loan if at all possible, until you have time to rebuild your credit. This may take six months or longer, but if you can find a way to wait on the money, you’ll find that you save thousands of dollars or more on interest over the lifetime of your eventual loan.


If your credit is already serviceable, or even very high, then you have many more options available to you. Start by learning what those options are. The guide linked above has a lot of good information about the lending industry available to internet users. There is a lot of competition in this sphere, which makes loan services faster, more efficient, and cheaper than they would be in a more homogenized borrowing landscape.


Start by having a conversation with your bank or credit union, if you have one. They will be able to give you a quick understanding of your current credit status, with relation to your credit score and credit history. Then they should be able to outline the terms for a loan they could issue you if you formally requested it.


Use this information as a benchmark when evaluating loans from non-traditional lenders, like the internet companies linked above. There are also a host of peer to peer lending options that may be available to you, depending on where in the world you live. Always select a loan that will not penalize you for early repayment, and which has the best interest rate you can find. These two factors will put you in the best standing to pay back your loan successfully without overtaxing your wallet.