There are a few options when it comes to asking for a loan. You can ask family/ friends; ask your employer or go through a financial institution. This article discusses the pros and cons of three of the most popular methods.
Approach a Financial Institution
If you are approaching a financial institution for a loan, you need to get your ducks in a row first. It is important to phone ahead and check what basic information and documentation you are going to need to take with you. Chances are that they are going to need a payslip and ID at the very least. Before approaching the bank, take a look at your financial situation and how you have managed your bank account. If you regularly pay your retail accounts late, have several credit cards and have exceeded your overdraft limit often at the bank, it will give the impression that you are unable to manage your finances and are also unable to afford more debt. Not having a good credit rating will mean that, should you get a loan, you will find that you will be charged a higher interest rate. Take this into consideration before approaching the bank and consider shopping around for the best rate.
Ask for a Loan from Family/ Friends
This is usually not a great idea. Keep in mind that borrowing money can jeopardise the relationship between you and your family/ friends and should be avoided if at all possible. Should this be the only option, do not feel offended or push the issue if the request is denied. It is also important not to take offence if the relevant party wants everything in writing – in fact, formalising the arrangement can help both parties. Keep good records of payments made and stick to arrangements in order to avoid trouble further down the line.
Ask your Employer for a Loan
Approaching your employer for a loan has advantages and disadvantages. Be careful when exercising this option as you may find that it can damage the relationship between you and your employer. Once again, if your employer declines the loan, do not take offence. It is also not a good idea to keep requesting loans or cash advances from your employer as it gives the distinct impression that you cannot manage your finances.
Before you make your decision, weigh up your options carefully. You can secure a loan if you do a little research before-hand.