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Best Ways to Borrow Money in 2022

Borrow Money 2022

The first rule of this guide is a simple one: Don't borrow money if you don't have to! If possible, pay for everything with cash or your debit card from your checking account. It'll keep you from racking up debt, which will one day come back to haunt you when it's time to buy a car or a house. And that'll make life complicated.

Money management is almost as important as personal finance's ability to manage incoming and outgoing funds goes hand-in-hand with net worth and credit score.

However, sometimes borrowing money isn't such a bad thing. Credit cards allow for impulse buys without worrying about a low bank balance, and a loan can buy freedom when it comes to expensive periods such as college.

In this guide, we'll take a look at the best ways to borrow money in 2022.


When most people think about borrowing money, the first thing that comes to mind is their local bank. Banks are one of the most common sources of personal loans. They offer various other services such as checking and savings accounts, certificates of deposit (CDs), and mortgage loans.

When dealing with banks, one thing to keep in mind is that they're not all created equally. The interest rates and fees you'll be charged will vary from institution to institution, so it's essential to shop around before you decide on a bank.

Another thing to remember is that not all bank loans are created equal. Some banks offer unsecured personal loans, while others require you to put up collateral such as your car or your house. If you're not sure what type of loan your bank offers, be sure to ask before you apply.

Credit Unions

Credit unions are another common source for personal loans. They work very similarly to banks, with one key difference: credit unions are member-owned and operated. This means that if you join a credit union, you become a part-owner of the institution, and you'll have a say in how it's run.

Another difference between credit unions and banks is that the interest rates and fees are usually lower at credit unions. Credit unions don't have to generate profits for shareholders to offer more competitive rates to their members.

If you're looking for a personal loan, be sure to check out your local credit union. You may be able to get a lower interest rate than you would at a bank.

Peer-to-Peer Lending (P2P)

Peer-to-peer lending is a relatively new type of borrowing institution, and it works a bit differently than banks or credit unions. You borrow money from individual investors rather than a financial institution with peer-to-peer lending.

This type of lending has become very popular in recent years, thanks to P2P lending websites. These websites allow you to search for loans from individual investors, and they offer a variety of filters so you can find the best loan for your needs.

When using a website like this, keep in mind that the interest rates can be a bit higher than what you would find at a bank or credit union. This is because peer-to-peer lending is still a relatively new concept, and there is some risk involved for the lender.

However, peer-to-peer lending can be a good option if you're looking for a personal loan and cannot get one from a bank or credit union due to a bad credit history. Just remember that the interest rates will be higher than what you might see elsewhere, and read all of the fine print before you sign anything.

401(k) Plans

401(k) plans are retirement accounts designed to help employees save their future. Employers often match some of their employees' 401(k) contributions to encourage participation and incentivize saving money in these accounts, which operate like regular IRAs (Individual Retirement Accounts).

One advantage of 401(k) plans is that they allow your money to continue growing without getting taxed until it's time to withdraw the funds when you're older. Plus, many employers offer employer matching - a money free from federal taxes given to you by your employer to contribute to your 401(k) plan.

Another advantage is that many companies offer their employees a way to borrow from this money penalty-free if they need it. This can be a good option for those who have fallen on hard times and need some extra cash or for those who want to take advantage of the tax benefits of retirement accounts before they reach retirement age.

However, keep in mind that withdrawing funds early from these accounts will result in penalties. This is why borrowing from them should only be done as a last resort and not for non-emergencies such as vacations.

Credit Cards

Credit cards are another commonly used source of borrowing money. As with most options on this list, credit cards can be beneficial when used properly. However, they can also be dangerous if you don't use them correctly.

One advantage of credit cards is that many offer high limits on the amount of money you can borrow. This means that if you need to borrow a lot of money for some reason, it's possible to do so with your credit card (and pay it back quickly) without having to sign up for a loan with higher interest rates (and pay those off slowly).

Another benefit is no prepayment penalties or required monthly payment amounts. This gives you more flexibility in paying off the debt as quickly as possible. If you have good credit and plenty of available funds, your creditors might not require you to pay off your credit card debt in full each month.

The biggest downside of borrowing with a credit card is the potential for interest charges. If you're not able to pay back the borrowed funds within a few months, the interest charges can be several times greater than what you would have paid if you'd gotten a bank loan instead.

This is why it's important to avoid borrowing money or spending too much money on your credit cards unless it's essential. Otherwise, having good credit could become an expensive proposition over time.

Impartial credit card comparison tables can be found here -

Margin Accounts

Margin accounts are another type of investment account that allows you to borrow money from the broker who manages your investments.

These accounts are often used by active investors looking to buy and sell stocks and other securities more frequently. The advantage of using a margin account is that it can allow you to purchase more shares of stock than you would afford.

The disadvantage is that you're borrowing money that you will need to pay back with interest eventually. In addition, the broker can choose to sell your assets if the value of your account falls below a certain level to protect their investment. This could result in you losing money on investments you thought were safe.

Public Agencies

Public agencies are another potential source of borrowing money. These include organizations such as the government (via the Treasury Department), state governments, and municipal governments.

One advantage of borrowing from a public agency is that the interest rates are typically much lower than you would find at a bank or other lending institution. In addition, there are no application fees or closing costs associated with most loans from public agencies.

The downside, of course, is that the process of obtaining a loan from a public agency can be slow and cumbersome. You might also have to put up your home or other assets as collateral to get a loan. And, if you're not able to repay the loan, the government could take possession of your assets.

Financing Companies

Financing companies are another option for those looking to borrow money. These companies specialize in helping people finance large purchases, such as cars, appliances, or medical procedures.

One advantage of using a financing company is that they can often provide you with the money you need more quickly than a bank or other lending institution. They also don't typically require as much paperwork or documentation as a bank might.

The downside of using a financing company is that their interest rates tend to be much higher than you would find at a bank. In addition, there are often fees associated with taking out a loan from a financing company. These can include an origination fee, a prepayment penalty, or a late payment fee.


Borrowing money can be a necessary evil in some cases. However, it's essential to understand your options and choose the best option for you.

When it comes to borrowing money, there is no one-size-fits-all solution. It's essential to consider your needs and financial situation before deciding carefully. By doing so, you can ensure that you're getting the best deal possible and that you're minimizing the risk of financial disaster.

So, those are some of the most common ways to borrow money. As you can see, there are various options available, each with its own set of pros and cons. Be sure to do your research before deciding which choice is right for you.