Your toaster oven is on the fritz during the same month all four of your tires went flat and money is tight. You know you need a loan, but with so many options, where is the best place to start?
If you have a decent credit score, you should begin by walking into your bank and asking to speak to someone about a loan. Experian says credit scores of 650 to 699 are considered fair and anything above that is good. Your credit score fluctuates depending on how much money you owe out, what you may be delinquent on, and what you’ve paid on time. It’s basically a snapshot of how likely you are to make loan payments.
Once you’re at the bank, you can ask your loan officer what is right for you. If you own a house, she might recommend a home equity loan. If you’ve paid your car off, she may suggest a pink slip loan, where you use your vehicle as collateral. She might decide a credit card with a specific limit is the ticket for your new tire needs. If you’re in good standing with the bank, depending on the amount you’re asking for, she may determine that you’re eligible for a signature loan. That requires no collateral at all.
If you do get a credit card, you might want to avoid taking cash advances out with it. These withdraws tend to accrue extra fees and higher interest rates not generally associated with purchases. Brynne Conroy at magnifymoney.com explains “you should only take cash out as a last resort in a true emergency.” She’s compiled a list of the twenty best cards with no cash advance fees and you can check it out here, in case tire store doesn’t accept cards.
Let’s say your credit score is below 650 due to an unfortunate error on the part of a collection agency, you still have options.
It can seem like there is a payday loan store on every street corner in America. You need to bring in a few pay stubs and write them a check that they’ll cash in a couple of weeks. These places get a bad rap for their insanely high interest rates, but if you’re sure you can pay them back in two weeks when you get paid, the money they lend you can get you through your toaster oven crisis. The down side is, if you borrow from them again in two weeks to pay off the original debt you can get stuck in a cycle of owing and borrowing. Use these institutions wisely and sparingly.
If that doesn’t appeal to you, badcreditloans.com may be able to link you up with a lender that will overlook your past mistakes. Their service is free, but many of the lenders they work with may charge high interest rates, depending on your credit score.
With these options, you’ll be driving yourself to the store and heating up dinosaur shaped chicken nuggets in your own kitchen very soon.