2 Ways to Get Quick Cash by Borrowing

It really can’t be helped that we come to a point when we find ourselves in a deep need of money. Such is what happens when we encounter emergency situations that can be solved by cold, hard cash. Now when such time comes, many people resort to methods that can earn them quick cash. One of the solutions for this is to simply borrow some money.

Secured Loans or Pawning

One of the most popular ways to address a problem that requires an immediate source of money to solve is to take a loan. Now a loan is basically money that you borrow from an individual lender or a lending firm. It should be paid within the time set by the lender, during which interest accumulates the longer the debt remains unpaid.

One type of loan is called secured loans. These are loans that are secured by a collateral, or a certain valuable that the borrower temporarily surrenders to the lender as a pledge. The collateral can be anything that the lender sees valuable, and the money the borrower gets is typically a percentage of the perceived value of the pledged item. Once the borrower pays back the loan and its interests, he or she gets the collateral back. In any other case, the loan will be defaulted and the ownership of the collateral is transferred to the lender.

As such, the borrower is basically selling, or pawning something to the lender. He or she can either just leave the debt alone and effectively grant the lender the ownership of the collateral, or “buy” it back by paying an amount that’s far below the item’s actual value.

Unsecured Loans

Next, we have loans that don’t require any collateral item. Instead, the validity of the loan rests on the promise made by the borrower to pay the money back. Thus, the lender faces a risk of not getting paid. To offset the risks, encourage quick cash payment, and discourage borrowers who can’t possibly afford to pay the money back, the interest is typically high.

The borrower also faces a lot of risks when taking this type of loan. First of all, he or she is practically forced to pay as soon as a payback is possible, as interests can pile up rather quickly. Also, he or she may be subject to litigation if the loan was defaulted, and this understandably costs far more than the money that was borrowed.

Borrow from People You Know

If you want to avoid taking loans and in effect getting debt with an interest, you can also resort to borrowing from people that you are acquainted with. Borrowing this way is a matter of trust, however. As such, it is important that you pay up quickly if you are aiming to maintain relations with those you have borrowed money from.

Borrowing is undoubtedly the fastest way to get quick cash. However, it is by no means the best one, as the long term risks often outweigh the immediate benefits.

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