The winter months can be a popular time to finally tackle all of those home remodeling projects that have been churning around in your mind. Or to take a vacation to warmer climates. The winter months can also bring on post-holiday panic as the bills begin to arrive and you have a visual reminder of how much shopping you did. If you are planning a summer wedding, you may be in need of cash now to pay certain vendors who require advance deposits.
How to access cash quickly
There are several ways consumers can speedily access much needed cash to cover the shortfalls or cover new expenses. Many turn to Payday loan wikipedia or take a cash advance on their credit card. Some simply pay whatever bills or expenses they can with their credit cards. None of these are good choices. A line of credit from the bank is another popular option. But, is a line of credit the best way to go? Is there a better alternative?
Line of credit: The basics
A line of credit is a flexible loan from your bank. It is an unsecured revolving account with a fixed maximum. Unlike a regular loan where you receive your money and begin making payments immediately, with the line of credit you do not begin making payments until you actually withdraw the funds. You only pay interest on the portion that you withdraw. The maximum amount is determined by your standing with the bank.
Why a line of credit may not be the way to go
1. You need good credit: The process for securing a line of credit is the same as with a regular bank loan. Because the line of credit is unsecured, banks are extremely cautious. You must have a Credit score and a demonstrated ability to repay the credit line.
2. Interest rate: The interest rate on your line of credit is variable and will be higher than a conventional loan. Because your access and repayment is also varied, you may be surprised at the amount of interest you end up paying.
3. Temptation: Once your line of credit is open, you may find yourself tempted to tap into it without first giving serious consideration to the consequences. A personal line of credit can become a means by which to cover things you cannot afford. In the end, you may find yourself not only maxed out on your line of credit, but also unable to pay your recurring bills.
What is the alternative?
When you find yourself in need of quick access to cash, a much better alternative is an unsecured loan from a peer-to-peer lender. With a peer-to-peer loan you can consolidate your debt, pay for wedding expenses, enjoy that much needed vacation or begin designing your dream kitchen. The application process is online, easy to navigate, and your funds are ready for you when you need them.
Unlike the bank, your credit score does not have to be perfect. P2P lending platforms are people lending to people. They have become the fastest growing lenders in the world. Interest rates are reasonable and fixed, fees are low and there are no surprises.
Your repayments are deducted automatically from your bank account. Instead of turning to a line of credit from your bank, open your computer and apply for a peer-to-peer loan.