Properly budgeting one’s income to pay all the monthly expenses and also have some left for various creature comforts is sometimes extremely difficult. This is especially true for fresh university graduates that are living in rent, looking for a job, or simply have one that pays too little. In most cases, not earning enough money to pay for both regular as well as unpredicted expenses, such as medical treatments, pushes many to get loans from banks or other private lenders. While this solution is perfectly reasonable in the short term, continuing to borrow money on a weekly or monthly basis (and in some cases failing to repay them on time) can cause serious damage to one’s credit rating. This can have serious consequences such as the inability to borrow any more money and, in some cases, even losing one’s personal property to the bank.
This having been said, there are ways to get short-term loans or micro-loans without worrying that it will lower your credit rating. These are all legal and properly regulated by the government, however, they are either not considered loans in the financial sense of the word or they are not reported to any of the major credit registers in the country. Here are the most popular methods:
· P2P Platforms
There are hundreds of both national and international P2P online lending platforms that are available to anyone interested. There are very few restrictions to join and once you become a member of a platform, borrowing money can take as little as a couple of days. However, this depends on the amount of money that you need to borrow.
P2P platforms work differently than banks. They do not offer loans, but they do put borrowers and lenders in contact with one another. The platform itself only acts as a safeguard to ensure that the terms and conditions are respected by all parties involved. Furthermore, these websites are not part of any banking system, which means that the transactions will not be reported to credit registers. Furthermore, most platforms do not perform credit score checks, making them a great choice for those who are either just starting and do not yet have a financial history, or for individuals who would not be eligible for a regular loan.
· Money Lending Apps and Online Services
Both the Android PlayStore as well as the Apple AppStore are filled with these apps. Money lending/borrowing apps enable individuals to create user accounts that they can use to borrow money in the blink of an eye. The requirements for creating an account are usually only proof of address, proof of identity and a bank statement (to link your bank account to the app). The main advantage of using these platforms is that you can take out micro-loans in a matter of minutes. Once a loan has been approved, the money will be automatically transferred to your bank account. Furthermore, once the app and bank account are linked together, the money that needs to be repaid can be set up to be automatically withdrawn from your current balance.
Few people think about borrowing from pawnshops when they run out of money. While it is true that most of these businesses attach evaluate the collateral that you offer at a lower value than they should, they are legitimate companies. In other words, you can always be sure that if you borrow money from them and repay it on time, they will keep their end of the bargain. Pawnshops are usually a great last resort for those who urgently need money to pay their rent or utility bills, however, they are not great as a recurrent loaning tool.