What’s the Best Way to Borrow Money?

There are several different ways to borrow money—so what’s the best way to borrow money? Should you borrow money online, visit a payday lender or use a credit card?

The choices can feel overwhelming, but we’ve got you covered! Our quick tips will help you identify the best way to borrow money based on your financial situation and goals.

If you’re aiming to rebuild your credit…
An online installment loan could be the best way to borrow money. With an online installment loan, you can borrow a few hundred to several thousand dollars. Applying online makes it fast, and you can usually get the money within a day or two. You’ll pay back an installment loan on a fixed schedule over the next few months to few years.

Your credit score and history will generally be considered when you apply for an online loan. The rates and terms are customized depending on your financial situation. Lenders look at your credit, employment and loan repayment history, as well as a number of other factors.

Involving your credit score in the loan process can impact your overall financial picture. Some lenders (including RISE) report loans to a major credit bureau. If you make on-time payments, having a loan could improve your credit score over time. In fact, your payment history is one of the most influential factors for your credit score.

If you need the funds for less than a few weeks…
A payday loan could be the best way to borrow money. Payday loans are short-term loans, usually for an amount less than $1,000. Lenders typically charge a fixed fee based on the amount borrowed, and you have until your next payday to pay off the amount borrowed plus the fee.

Payday lenders may not examine your credit report or credit score when determining your eligibility. They also may not report on-time payments to the major credit bureaus. If you don’t pay back your loan, however, the lender might send your debt to a collector—and the collector may report your delinquent payments to the credit bureaus, which will likely hurt your credit score.

If you want to use collateral…

A secured loan could be the best way to borrow money. Secured loans are backed by an asset like a house, car or other valuable item. Mortgages, auto title and pawn loans are common types of secured loans.

Secured loan terms are typically based on the value of the collateral, making your financial history less of a factor. If you stop making payments on the loan, the lender can seize the asset—known as repossession or foreclosure—and sell it to recoup some of their losses. Because a secured loan is backed by an asset instead of your general ability to repay the loan (known as “creditworthiness”), the terms of a secured loan can sometimes be more attractive than the terms of an unsecured loan. But remember: With a secured loan, your collateral is on the line if you stop making payments.

If you want flexibility to borrow different amounts at different times…
A credit card could be the best way to borrow money. With a credit card, you can continually make purchases (i.e. borrow money) until you reach your credit limit. You can borrow a little bit this month, and then borrow a bigger amount next month—as long as you stay below your credit limit and make on-time payments.

When you apply for a credit card, the issuing company will check your credit history to determine your annual percentage rate (APR) and credit limit. A better credit score will usually land you a higher credit limit and lower APR. If you pay back the balance in full each month, you won’t be charged interest. If you don’t pay back the full balance, you’ll be charged interest on the remaining amount. Credit card interest can be compound (i.e. interest is charged on already accrued interest), so you’ll pay more interest the longer you wait to pay.

If you already have a credit card and need cash ASAP…

A credit card cash advance could be the best way to borrow money. Most credit cards will let you instantly withdraw cash at an ATM or bank—if you have credit available to tap. You’ll pay a transaction fee plus interest at a rate which is usually higher than the card’s regular annual percentage rate (APR). Cash advances are generally limited to an amount that’s less than your credit limit.

If you want to improve your money habits and save money…
An online installment loan from RISE could be the best way to borrow money. We offer a simple online application, cash in your account as soon as tomorrow, and interest rates that go down over time.  Here’s how it works:

1. Apply online:  After you provide some basic info, we can generally let you know if you’re approved in just seconds.
2. Choose terms: Once approved for a certain amount, tell us how much you want to borrow. Our loan amounts range from $500 to $5,000 depending on your state of residence. Use our Design Your Loan feature to choose payment dates that are convenient for you.
3. Receive funds: Applications processed and approved before 6pm ET are typically funded electronically the next business day.
4. Build credit. We’ll give you instant access to your credit score plus free credit alerts and financial education tools to help you build better money habits and improve your financial future.
5. Save money. RISE wants to help you get out of debt as soon as possible. But if another emergency comes up and you need to borrow more, you may see a 50% drop in interest rate on future loans if you’ve been making on-time payments for at least 24 months^*. Restrictions apply, so check out more details here.

RISE is in your corner with the money you need and rates that go down over time. For many hardworking people, a RISE loan is a great way to borrow money and start building a better tomorrow. Apply now and see if a RISE loan could be right for you.

^* Customers in good standing may qualify for a reduction in annual percentage rate ("APR"). Installment Loan Customers: In order to be eligible, you must continue to meet RISE's credit criteria, and we will evaluate the stability of your personal information and identity for each new loan.  If eligibility requirements are met and you make 24 successful, on-time monthly payments (48 bi-weekly payments), the APR for your next loan will be 50% off your original loan's APR (excluding customers with starting rates of less than 75%). Additionally, if you continue to meet eligibility requirements and you make 36 successful, on-time monthly payments (72 bi-weekly payments), you will qualify for a 36% APR for your next loan.  Note that it may take two or more loans to reach 36% APR.  (In Mississippi, if you make 24 monthly payments (48 bi-weekly payments), the monthly handling charge for your next loan will be 50% off (excluding customers with starting rates of less than 75%).  And, if you make 36 monthly payments (72 bi-weekly payments), you qualify for a monthly handling charge of 3% for your next loan with RISE.  Note that it may take two or more loans to reach a 3% monthly handling charge.) Line of Credit Customers: In order to be eligible, you must continue to meet RISE's credit criteria, and we will evaluate the stability of your personal information and identity. If eligibility requirements are met and you make 24 successful, on-time monthly payments (48 bi-weekly payments), the APR on your line of credit will be reduced to 50% off your original APR. Additionally, if you continue to meet eligibility requirements and you make 36 successful, on-time monthly payments (72 bi-weekly payments), you will qualify for a 36% APR on your line of credit.