Where to Borrow Money When You Need It Urgently

Still, the Bank

First, find out if you can get a loan from a bank. Interest rates there are usually lower than in microfinance organizations, credit consumer cooperatives, or pawnshops.

Often, banks approve and issue moderate amounts to their clients without additional documents, even on the same day, directly to a card. You just need to submit an application through the bank’s app and wait for a response.

However, if you currently do not have an official income or have past delinquencies, the likelihood of approval is much lower. In that case, other options should be considered.

Microfinance Organization

If a bank rejects your application but you urgently need money, you can turn to microfinance organizations. Like banks, they consider your payment discipline and credit history, but their requirements are less strict.

However, the interest rates for loans from microfinance organizations can be many times higher than bank rates.

Interest on a microfinance loan can be lower if it is secured by collateral, such as a car or garage. But if you fail to repay the debt, you will lose the collateral. For this reason, microfinance organizations are prohibited from issuing loans secured by residential property.

If you fail to repay on time, you will have to pay a penalty. The amount is always listed in a table on the first pages of the contract, along with the cost of additional services, such as insurance. Ignoring these details can make your debt much higher than planned.

Pawnshop

A pawnshop is a suitable option when you urgently need money and have a valuable item you do not plan to use in the near future. For example, you own a car but only use it in summer to go to the dacha, or you have an expensive fur coat that won’t be needed in warm seasons.

Until you repay the debt, you will be separated from the pledged items. If you fail to repay, the pawnshop will sell the collateral.

You can pawn any property except real estate. The loan amount depends on how the pawnshop values your item, but it is likely to be less than its market value.

Terms in pawnshops are usually less favorable than in banks. Like all lenders, pawnshops charge penalties and late fees for missed payments — keep this in mind and carefully read the entire contract before signing.

Conclusion

Do not borrow if you are not confident you can repay the money with interest. Many hope the debt will just disappear or be forgotten. However, in practice, it is impossible to escape creditors.

Carefully read the contract and any other documents before signing. If you do not understand certain terms, ask the financial institution’s staff for clarification.

Check the contract for the full cost of the loan — it shows how much you will overpay. Pay attention to additional services and decide if they are really necessary. Calculate how much your debt will increase if you cannot repay it on time.