Are you looking to take out a 5000 loan? If so, then there are a few options that you need to consider before you decide to borrow any amount of money. In this post we will look at a few of these options, hopefully providing you with a solid basis upon which to make a good decision for taking out a 5000 personal loan.
Options for Taking Out a 5000 Dollar Loan
The first thing you need to understand is what your options are for such loans. Generally speaking, there are 3 different options to look at, and which option will be best for you will depend on what your credit situation is:
1) Personal Loan from a family member or friend - This option is sometimes the most recommended, at least from a cost perspective. Most friends and family will lend you money with very low, if any, costs associated with the loan. In addition, it's quick and easy - as long as you don't have issues paying it back. However, don't undervalue the risk of not being able to loan back, and thus creating problems/issues with the person who lent you the money. Many times, this risk does not justify the increase savings and ease of the loan.
2) Bank Loan - This is the most common and traditional way to get a loan. However, this will only be an option if you have good credit and have a purpose for the loan. Banks will usually require such information on any loan, even a small $5000 loan.
2) Guarantor Loan - This may be one of the best options for borrowing 5000 dollars. A guarantor loan is one in which someone in addition to the primary borrower signs for the loan. Just like getting a co-signer on an auto loan, you could go find someone who is willing to lend their name and credit to you so you can get a loan from a bank or credit union. By doing this, you not only can qualify for the loan more easily but you also can get a much better interest rate on the loan. However, make sure that someone has a good credit score and a good payment history, otherwise they won't help you out much.
3) Payday Loan - this option can be a good option if you are looking for a 5000 loan with bad credit and do not have anyone that would serve as a guarantor (see option #2 below) or who would lend you the money themselves. The reason why I put payday loans for 5000 below both of the other options is simply due to the costs of such loans. Average annual percentage rate (APR) for payday loans is over 450% (and remember, average means some will be even higher than that). In addition, they are typically due in just one or two weeks, meaning that these loans are best if you are looking for a short-term financing need and don't have any other options. Furthermore, sometimes it's difficult to take out a 5000 dollar loan with this method - most payday lenders offer 1000 loans up to 3000 loans, with only a small few offering more money than that.