Individuals and businesses need low cost loans for a variety of reasons. An individual may need to purchase a car, take advantage of an investment opportunity, or pay for a new central air unit. Businesses may need money to make payroll, purchase new equipment, or build a building. What ever their needs, there are a number of choices for finding the money they need.

Many people automatically think of the local bank when they realize they need a loan. Banks have tightened their lending policies in the wake of the recent financial crisis. Today, banks want a great credit score and some sort of asset to secure a low cost personal loan. The days of banks handing out money like candy are over.

If you own your own home and you still have a sizable amount of equity, then a low cost home equity loan may be an option for your money needs. With rates tied to the fed rate, it is a great time to look into home equity loans. However, like the adjustable rate mortgages many people did not understand, these rates are not fixed and will more than likely go higher in the future. If your money needs are short-term though this is a fantastic time to utilize low cost refinance loans.

Low cost payday loans may not be the first thing that pops into someone's head when the need for money arises; however, recently, legislatures have been grumbling about capping the rates that payday companies can charge. Combine that with stiff competition in the industry and lower rates on short-term payday loans may be on the horizon. However, currently, if you are in the need for a loan, payday loans should be your last resort.

Another great option for low cost loans would be friends and family members. Many people advise against ever borrowing money from friends and family; however, with the proper structure and mindset these loans can be beneficial to both parties. When borrowing from this group you must go into the arrangement with the full intention of paying back the money no matter what. If your friends and family have the faith and trust in you to take a chance by loaning you money, you should do everything in your power to repay that money, even if it means taking a second or third job. There are new services that formalize a loan between friends and family by providing a legal contract between the two of you. This would be a great gesture of good will on your part to suggest a service such as this, and it would greatly increase the confidence in your friend or family member that you intend to pay back the money. With today's poor interest rates received by savers it is quite likely that you have a relative that would benefit from a higher interest rate on their money from a loan to you, just as much as you would benefit from the money form them. is another great option for loans if you have good credit. The system is based on letting people pool their money together to loan to borrowers. The rate is based on a bidding system. The higher your credit score, the lower the risk of you not paying the loan back and in turn the lower your rate of interest. They also allow you to write a brief story about why you need the money and why you are in a position to pay it back. This is a great feature that hopefully won't be taking advantage of by people making up sad stories to increase their chances of getting money.

Businesses are another matter when it comes to loans. Businesses often have plenty of assets to back a loan. This gives businesses an advantage to obtaining a low cost loan. However, if a business is a corporation, the lender may require a personal guarantee form the owner to further ensure the loan repayment.

Most businesses rely on their local bank for loans. Often times they have cemented long term relationships with the loan officer and the local bank understands their business and their needs. With these solid relationships, businesses should be able to ask for lower rates on their loans, providing a good track record.

Businesses, like individuals, may also turn to family members for loans. When borrowing from family, always structure the loan as formally as possible. An alternative to a loan is offering an interest in the business as a silent partner. Many people would love to own a piece of a small business but have no desire or know how of everyday operations. This allows them to participate.

Accounts receivable loans are often obtained by business as a way of raising capital. With these loans a businesses receivables are pledged as a means of securing the loan. This allows businesses that may have large amounts of money tied up for long periods of time.

Low cost unsecured loans are hard to come by for businesses. Lending institutions are hesitant to allow small companies to borrow large amounts with no collateral because of the fact that many businesses are corporations and their personal assets are not at risk in the event of default. For this reason, many businesses are better off applying for low cost secured loans. Secured loans can be guaranteed by accounts receivable as mentioned earlier, or by other assets of the business such as equipment.