Borrow Smart, Avoid High Fees

Whether you are looking for long term credit or a short term loan, ensure you are getting great interest rates from reputable lenders without damaging clauses that loop you into rising interest, extra penalties or loan calls. By searching out all your options before you decide to get credit or a loan you can save yourself a lot of money in interest and penalties.

Government Grants or Loans

Many municipal, state or federal governments offer loan programs for a wide array of needs to consumers and small businesses. Depending on your need some of these programs are grants. The difference between a grant and a loan is that a grant is usually for a very specific purpose but does not actually need to be paid back as it is a gift essentially.

So if you need to upgrade the heating in your home, its insulation or windows, many programs exist for that or if you need to invest in capital equipment or labor training there are grant programs for those as well from your government. Although these programs have more strict application basis their repayment terms are much more favorable including lower interest rates, longer repayment periods and even grants that are free.

Most governments also provide specific funding loans for different sectors of the economy based on need. There are almost always student and business funding opportunities available at all three levels of government. Other types of need include agricultural loans, disaster relief, veterans and housing loans. Whichever your need there is most likely a government loan with an easy payment schedule and a reduced interest rate to match.

Non-Profit Lenders

If you are a small business or an individual in need of quick cash for an emergency purchase or other qualified lending need, these lenders are often the right choice. Without the same regulations that large financial organizations bear, these lenders offer a service that can meet your needs.

Forget alternative lenders, which offer quick cash for a portion of your business revenue or wages in return for exorbitant interest rates. Instead choose a non-profit lender that is in the business of helping people with reasonable rates that do not exceed 15% per annum of interest. Other short term loans such as cash advances or pay day loans can often equate easily to 100% interest or more over a per annum charge.

These alternative sources such as pay day loans can often write in extra admin or deferral charges as well, ballooning your principle loan amount leading to even larger debts. Common financial wisdom generally dictates that if you cannot afford the fees of the loan, you cannot afford the loan. In the case of cash advances and pay day loans, unfortunately most people that get them cannot afford them.

Of course even non-profit lenders can charge high interest rates and you will need to assess the total cost of the loan in comparison to the next two options.

Exhaust these areas of loans and grants before you attempt financial institutions with higher interest rates or less forgiving repayment models.

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