The smartest (and dumbest) ways to borrow moneyBDO Money Matters
Oct 23, 2012
By Mark B. Aragona for Yahoo! Southeast Asia
Sometimes when things are tight and you find yourself needing a loan, it’s tempting to grab the closest source of credit you can find. Your credit card, for example, is an easy way to borrow, but can be a double-edged sword if you end up defaulting on payments and getting bad credit history. Thankfully, you do have alternatives—some you probably haven’t even considered before:
Borrow from your mortgage. This works if you’ve been paying for your home for some years and your home’s accumulated some value. You can unlock that value by borrowing back what you paid, essentially another loan secured by your house. Just be sure you can pay it all back, or you may end up without a roof on your head.
Use your life insurance policy. Under the impression that life insurance is only useful when you die? The cash value of your policy can be a quick source of funds. How much depends on the type of policy you have and how long you’ve been paying for it. Traditional types of policies allow you to obtain loan that’s secured by the cash value, but variable types don’t require you to return the cash since it’s considered an investment.
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