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Need Cash Fast? Compare Emergency Loan Options

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

A financial emergency can strike at any time, and you may suddenly find that you need an abundance of cash — fast. Unfortunately, not everyone is able to get through these situations without borrowing money.

Tens of thousands Americans are living paycheck to paycheck. According to a recent consumer expectations survey by the New York Federal Reserve, one in three Americans say they wouldn’t be able to come up with $2,000 within a month to cover an unexpected expense.

If you don’t have an emergency fund, what do you do when you get hit by an unexpected medical bill or your car breaks down? We give you options for finding money quickly if you need it right away, and options if you can afford to wait.

When you need money in 1 or 2 days

Credit cards

If you don’t need cash, your credit card could be a way for you to handle an emergency almost instantly. As expensive as credit cards are, the APRs are generally not going to be too much higher than 30%.

“It’s not ideal,” Chris Dlugozima, a financial wellness expert at GreenPath, a nonprofit debt and consumer credit counseling service that operating in all 50 states. “But if it comes down to a credit card or a payday loan that’s charging 500% interest, it’s sort of the lesser of two evils.”

A credit card can be a quick fix for a one-off emergency. However, if you routinely fall behind on bills, you should consider turning to your credit card with caution. The double-digit interest rate will quickly increase the amount you owe if you’re not able to pay the balance off in full on time.

Credit Cards

Pros

Cons

It allows card holders to access funds quickly.

High APRs, averaged at 16%.

There may be flexibility if you struggle with credit card debt. For instance, you could try to work out a repayment plan with your credit card company.

Your debt can quickly snowball if you keep getting into credit card debt for emergencies.

APRs are lower than those of credit card cash advances.

Credit card cash advances

In a time-sensitive situation, a credit card advance allows you to borrow cash against your line of credit. You request the money at an ATM with your credit card and a cash advance PIN, in person at a bank, or with convenience checks you make out to yourself and cash.

While they are relatively easy to obtain in emergencies, cash advances typically have higher APRs than regular purchases and they carry fees (3% to 5% of the money borrowed). Unlike a regular purchase, where interest doesn’t start to hit unless you don’t pay the balance, interest starts accruing right away when you advance money.

It can be a costly way to borrow money, but if you think a cash advance is the best option for you, make sure you pay the advance off as quickly as possible.

Cash Advances

Pros

Cons

It allows card holders to access cash quickly.

Higher APRs than normal— usually up to 30%+.

There is a service fee and possibly an ATM fee.

Your cash advance credit limit may be different than your credit limit for purchases. For example, a bank may give you a total credit limit of $5,000 but limit you to using $2,500 of it for a cash advance.

Signature loans

If you have relatively good credit and a good relationship with a bank, you can try to get a signature loan or a personal loan in an emergency. Your local community bank, credit union, or a major retail bank might be willing to work with you in this situation.

A signature loan is an unsecured form of borrowing, and its interest rates range from 8% to 15%, depending on your credit and the relationship you have with the bank. It usually has shorter terms than other personal loans, ranging from just a few months to 4 to 5 years, on average.

The application and approval process can be quicker because it’s a shorter-term, less risky loan. To apply, you must submit qualifying financial documents, including proof of income and employment.

Signature Loans

Pros

Cons

The underwriting process can be quick.

APRs are higher than collateral-based loans.

They carry lower APRs than credit cards.

There’s a lack of flexibility after you take out a loan if the emergency is on-going and you need to borrow more.

You will know how much to budget for debt repayment every month.

Payday loans and auto title loans

Payday and auto title loans are high-cost loans that can be obtained easily and quickly from storefront or online lenders. Consumer and financial experts strongly recommend borrowers steer clear of such loans because they are designed to profit based on borrower’s inability to repay.

Payday loans are small-dollar personal loans that become due in a lump sum on your next payday. A typical two-week payday loan with a $15-per-$100 financing fee translates to an annual percentage rate of almost 400%. In comparison, the benchmark APR for affordable small loans is 36%. If you can’t repay on the next payday, you can roll over your debt and incur another $15 fee — that’s when a debt trap begins.

Of the 2,900 payday loan complaints received by the Consumer Financial Protection Bureau in 2017, 30% were about unexpected fees and 15% on their unaffordability.

A title loan is a secured loan, and you have to put up your car as a collateral to get it. Title lenders charge an average of 25% as a monthly financing fee, which adds up to an APR of at least 300%, according to the FTC. If you can’t repay the loan at all, you risk losing your car.

“You should try everything else,” said Juan Guevara, a certified financial planner based in Colorado. “And if there’s absolutely no other way to do anything, think about those shorter term loans.”

If these risky loans are your last resort to cover an emergency, be sure to pay off the debt in the shortest term possible to avoid getting caught in a debt trap or losing your car.

Payday/Title Loans

Pros

Cons

The underwriting is both weak and quick.

They are extremely expensive loans with triple-digit APRs.

Borrowers may risk getting caught in a debt trap if they can’t repay payday loans.

Borrowers may lose their cars if they can’t pay off the debt.

Alternatives

Negotiate with your creditor

When you are in a financial emergency, the first step is to try to negotiate with your creditor before borrowing money. Before a bill comes due, talk to your creditors and explain the circumstance. If you need a few more days to come up with the money, they’re way more likely to work with you then you might realize. Many utility companies and hospitals offer lower interest — even 0% — payment plans to make sure that you can pay past due balances over the course of several months.

Ask for help from friends and family

If the negotiation doesn’t work out, ask your family or friends and see if they can loan you money before turning to risky, expensive loans.

“There might not be an interest rate attached to that but you also got to be careful that you could be damaging a relationship there if you don’t end up paying [the debt] back,” Guevara said.

When you need money in 1 or 2 weeks

“Payday alternative” loans from credit unions

If you have a little bit more wiggle room, plenty of community banks and credit unions offer small-dollar loans with much lower interest rates than payday or title loans. These types of financial institutions are much better regulated than high-cost lenders.

For example, all federal credit union loans have an 18% interest cap, with one exception — Payday Alternative Loans, which have interest rates capped at 28%.

“Payday alternative” loans

Pros

Cons

They are safer loans compared to unaffordable payday lending.

They carry fairly high APRs.

The loan term is short, ranging from one to six months.

It takes a while to obtain the loan. Borrowers must be members of the federal credit union for at least one month.

The loan amount is small, typically up to $1,000.

Personal loans

Personal loans offer perhaps the greatest flexibility when an emergency strikes. You can borrow money at a fixed interest rate over a fixed amount of time, then you pay a fixed monthly payment until your loan is paid off.

The process to apply for a personal loan is similar to applying for a credit card or auto loan: The lender will run your credit and offer you a certain rate based on your creditworthiness. Besides your credit score, you’ll need to prove that you have the ability to repay your loan, usually with pay stubs or other evidence of employment.

A personal loan is a form of unsecured borrowing, which means its interest rates are generally higher than secured loans, such as a mortgage. The higher your credit score, the lower rate you may qualify for. Nationally, a personal loan with a 24-month loan term carries an average 10.31% interest rate. You can apply for a personal loan from banks and online lenders. Use our table below to compare personal loan options to find the best option!

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A Personal Loan can offer funds relatively quickly once you qualify you could have your funds within a few days to a week. A loan can be fixed for a term and rate or variable with fluctuating amount due and rate assessed, be sure to speak with your loan officer about the actual term and rate you may qualify for based on your credit history and ability to repay the loan. A personal loan can assist in paying off high-interest rate balances with one fixed term payment, so it is important that you try to obtain a fixed term and rate if your goal is to reduce your debt. Some lenders may require that you have an account with them already and for a prescribed period of time in order to qualify for better rates on their personal loan products. Lenders may charge an origination fee generally around 1% of the amount sought. Be sure to ask about all fees, costs and terms associated with each loan product. Loan amounts of $1,000 up to $50,000 are available through participating lenders; however, your state, credit history, credit score, personal financial situation, and lender underwriting criteria can impact the amount, fees, terms and rates offered. Ask your loan officer for details.

As of 28-Feb-2019, LendingTree Personal Loan consumers were seeing match rates as low as 3.99% (3.99% APR) on a $10,000 loan amount for a term of three (3) years. Rates and APRs were based on a self-identified credit score of 700 or higher, zero down payment, origination fees of $0 to $100 (depending on loan amount and term selected).

Compare offers and shop for a personal loan on MagnifyMoney’s personal loan online market.

Personal loans

Pros

Cons

There are a variety of loan amounts and terms to choose from.

APRs can be high if your credit is not great.

You know exactly how much you will ultimately pay in interest.

If you have a situation where you don't know exactly how much cash you're going to need, a personal loan can be limiting since you must apply for a set amount of money.

You request a certain amount of money to cover an emergency, and so there's no temptation to borrow additional funds later.

Credit cards with 0% intro APR

If your credit score is good, apply for an introductory 0% interest credit card. Balance Transfer credit cards let you wait as long as 21 months to pay off your balance without accruing interest.

A balance transfer card is a solid option for those with a tall stack of credit card debt. It allows users to move debt from a high-interest credit card to a card with a promotional 0% APR period (not through same card issuer). As a result, you could pay less in interest than you would if you kept the debt where it is. But if you can’t repay your debt before the promo period ends, the credit card company may retroactively charge you all the interest that they would’ve charged during the intro period.

Credit cards with 0% intro APR

Pros

Cons

You can borrow money for 0% interest for a period of time.

If you can’t repay your balance within the 0% interest period, you may be hit with all the interest you would have accrued during the intro period — known as deferred interest.

Some cards charge $0 intro balance transfer fees, allowing you to cut costs.

You don’t know exactly how much money you will ultimately pay in interest.

The new card may offer a sign-up bonus and/or long-term perks, although this may not be a concern when you are in an emergency.

You need a good or excellent credit score to qualify for the best offers (generally 700 and up).

If you are in an ongoing financial tragedy, a credit card gives you flexibility in terms of the amount of money you can borrow.

In most cases, you have to pay a balance transfer fee — typically 3% of your total transfer amount.

401(k) loans

A 401(k) loan allows you to borrow up to $50,000 or half of the total amount of money in your account, whichever is less. Most 401(k) plans offer such loans.

The funds are taken directly out of your 401(k) account balance and a repayment plan is created based on the amount you borrowed and the interest rate you agreed to. When you make payments, the money goes back into your 401(k) account, typically through an automatic payroll deduction. The maximum loan term is usually five years, and you’ll need to make payments at least quarterly.

If you fail to repay the loan on deadline, the money withdrawn is counted as taxable income and the IRS will charge you a 10% early withdrawal penalty if you are under age 59½.

401(k) loans

Pros

Cons

You can get money relatively quickly without any credit check because you are essentially borrowing from yourself.

If you default on the loan, the money you borrowed will be taxed and hit with a 10% penalty unless you’re already age 59½ or meet other special criteria.

You have a long time to repay the loan.

The money you borrowed is not participating in the market and you may lose out on compound interest. It affects your portfolio performance over time.

The interest you pay back to the account is money put back in your retirement fund.

Alternatives

Asking your employer for help

While it’s not common, some employers may offer paycheck advances or financial help in other ways to help you get through an emergency. For instance, some employers have an Employee Assistance Program (EAP), which are designed to help resolve problems workers encounter in their life, financial and personal alike.

If your company doesn’t have an EAP, you can still ask if they can provide some type of loan or even give you a raise if you’ve been doing a good job, Guevara suggested. Even if they decline your request, it doesn’t hurt to ask.

Negotiate your charges

As we discussed earlier, negotiating is probably one of the best tools you have when an emergency arises. Explain your situation to your creditor and they may work out a payment plan with you or simply extend your due date, depending on the specific situation.

When you need money in 1 or 2 months

Home equity loans or HELOC

When you have time on your side, you may leverage the equity in your home to cover short-term emergency needs. You can take the time time to shop around with different lenders for a home equity loan or a home equity line of credit (HELOC). Both loans are secured by your house.

A home equity loan is a fixed-rate installment loan. The borrower gets a one-time lump sum. It’s repaid in equal monthly payments over a fixed period of time — usually in 10, 15, 20 or 30 years. It’s the second mortgage on your house.

A HELOC, on the other hand, is a revolving credit line. How much you can take out will depend on your home’s value, your remaining mortgage balance, your household income and your credit score. HELOCs typically have variable interest rates, so it’s important when you’re applying for a HELOC to understand exactly how much can the interest rate go up.

You can apply for a HELOC and leave it open, allowing you to draw funds from it as needed; it can stay open for up to 10 years. As you pay off the principal, your credit gets replenished and you can use it again. You only pay interest during this time period. After the line expires, you enter the repayment period, when you’ll repay the remaining balance as well as any interest owed, if there is any.

Some financial planners advise their clients to open HELOCs even they are not planning to use them, just in case something comes up in the future. Most lenders will let you borrow up to 85% of your home value, minus your outstanding debt.

The appraisal and underwriting process for both loans takes one to two months. Qualifications vary, but most lenders will check your credit and debt-to-income ratio. You should expect to pay closing costs and other fees upfront, which range from $500 to $2,000.

Interest rates on both loans are not that different from a regular mortgage rate, which is lower than other unsecured loans.

Home equity loans or HELOCs

Pros

Cons

Both have significantly lower APRs compared to other unsecured borrowing options, such as credit cards or personal loans.

You have to make monthly payments and you don't have a 0% interest promo period.

You have a long time to repay the loan and the monthly payments are usually quite small.

Both types of loans almost always have closing costs and other fees.

With a home equity loan, your monthly payment is predictable because your interest rate will be fixed.

If you take out a HELOC with a variable rate, your monthly payments may change.

You can withdraw funds as needed with a HELOC.

Defaulting on either loan could result in a foreclosure.

Alternatives

Sell some assets

If you have one or two months to come up with funds, you may want to see if you can generate some income by selling some of your assets, either doing a yard sale or selling your possessions on eBay.

A key takeaway

When emergencies arise and you don’t have rainy day cash, don’t panic — you should first and foremost try the cost-free ways to bridge a financial shortfall. If you can’t borrow money from friends and family or work out a payment plan with your creditor, then consider the least expensive loan that comes with the lowest level of risk after determining how much money you need and how much time you have to come up with the funds. Don’t focus just on the monthly payment, but the interest rate and the loan term as well.

After recovering from this current financial emergency, start planning for the next one. Life will inevitably throw a curveball at you again, be it unexpected job loss or an astronomical hospital bill. If you start putting money away now, you will have the money to deal with the next financial setback.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Shen Lu
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Shen Lu is a writer at MagnifyMoney. You can email Shen Lu at [email protected]

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Rising Incomes Outpace Increasing Housing Costs in Every Major American City

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Most U.S. workers’ real wages have been stagnant over the past four decades, according to analysis from the Pew Research Center. With the prices of crucial expenses such as housing and healthcare increasing over these decades as well, consumers’ purchasing power today is about the same as in the 1970s. These circumstances have contributed to the belief that overall, Americans’ incomes aren’t keeping up with the rising costs of living.We set out to analyze U.S. Census Bureau data for America’s 100 largest metros to compare incomes to housing costs. Our findings show that this trend might be reversing — at least for residents of America’s biggest cities.

Compared to three years ago, the typical household in these cities has more money left over after paying for housing. In other words, even though housing costs have risen over the last three years, the dollar amount of wages have grown faster and exceeded the dollar pricing increases for both renting and owning a home.

In fact, famously-expensive metros saw the biggest jumps in the gap between income and housing costs. This trend also holds in places where rents take a greater share of household income.

Key findings

  • The median household in each of the 100 largest metros takes home more cash after paying for housing than they did three years ago.
  • Households in San Francisco saw the biggest gain in gross income after housing costs, up $10,642 more per year compared to three years previous. For renters, the amount is $9,982, and for homeowners with a mortgage the amount is $12,178.
  • Annual savings at the other end of the list are still substantial. The median household in Albuquerque, N.M. has an extra $1,750 a year — $1,438 for renters and $2,194 for homeowners with a mortgage.
  • Rent costs are increasing at a faster rate than costs for households who own their own homes and still have a mortgage in every metro. Even so, wage growth has outstripped those increases.
  • The 2017 homeownership costs in most metros exceeds the 30% marker that is traditionally used as a guideline for affordable housing costs. This suggests that homeownership is still not affordable for most households in those metros.
  • In a few places, the percentage of a household’s income spent on rent has increased — such as in Denver; Colorado Spring, Colo.; and San Jose, Calif. Even so, these households still take home more dollars after paying rent than they did three years ago.
  • The effect is especially pronounced in famously expensive cities; the first seven metros on our list, from San Francisco to Boston, are notorious for high rent costs.
  • Median housing costs have actually dropped in a handful of cities, such as Atlanta (down by $24 per year), Birmingham, Ala. ($24), Chicago ($24), Cleveland ($84), Detroit ($144), Jacksonville, Fla. ($36) and Las Vegas ($216).
  • Rents have risen at a faster rate than homeownership costs, but median costs for the latter are still higher across the board. As a result, homeowners today have more funds leftover after paying their mortgages and property expenses, even though they are spending a greater percentage of their incomes on housing.
  • Median rents in every metro lie comfortably below the 30% mark of median gross income, but homeownership costs exceed the 30% rule in most places.

Our study compared local incomes to housing costs in the top 100 metros. We then ranked them based on how much local wages have increased compared to housing costs, dollar for dollar, with the highest increase starting at 1 (in green on the map above) and going to the lowest at 100 (in red).

Hover over the map to see the ranking of each city and how much incomes after housing costs have increased in the past three years.

10 cities where incomes are rising faster than housing costs

When income rises faster than housing costs, our study found, this puts thousands more dollars per year into people’s pockets.

With these extra funds, households might find they have more funds available to cover other living expenses, from groceries to utilities to healthcare. This money can ease the demands placed on households by consumer debt such as credit cards, auto loans or personal loans. It could even grant them more room in their budgets to save, get out of debt or invest.

Here, we highlight the 10 cities in which the gap between median incomes and housing costs is growing the fastest.

1. San Francisco

San Francisco has become notorious in the past decade for its soaring housing costs, but it appears that local incomes are finally catching up. This city had the highest increase in local incomes left over after housing costs — for both renters and homeowners.

Overall, San Franciscans have $10,642 more in gross income after paying for housing than they did three years ago. That translates to a gain of $9,982 for renters, and $12,178 for homeowners.

Despite these high dollar amount increases, the percentage of the median gross income required to cover the median rent has remained mostly unchanged, falling just 0.2%. By contrast, San Francisco had the steepest decline in the percentage of a local median income required to cover homeownership costs — down 12.3% from three years ago.

2. San Jose, California

Neighboring San Francisco is San Jose, the next city where residents saw the largest increases in incomes overall, rising $12,849 in the past three years. This increase helped typical workers pocket $9,909 more in gross annual income after paying housing costs, compared to three years previous.

Rent costs rose faster than home owning costs over those years, too. Renters’ after-housing income rose $9,117 in the past three years, compared to $11,913 more for homeowners.

Despite having one of the largest increases dollar-for-dollar, however, San Jose’s numbers are less impressive when comparing housing costs directly to income. The percentage of the city’s median gross income required to cover median housing costs fell by just 0.8% in the past three years — the smallest decrease of any city we surveyed.

3. Seattle

In Seattle, the median gross income increased by $8,300 per year in just three years. Local workers’ paychecks increased far faster than their housing costs, which were up $1,164 during the same period — resulting in a net gain of $7,136 overall.

During the three years we looked at, Seattle homeownership costs decreased by 10.3% relative to income while rent costs were up 2.6% compared to incomes. The three-year increase in income after housing costs was $6,272 for renters, and $8,180 for homeowners. In actual dollars, this meant homeowners netted $1,908 more per year from rising incomes than their renting neighbors.

4. Austin, Texas

At No. 4 is Austin, where the amount of a median gross income left over after paying median housing costs increased by $6,737 per year. This number specific to renters is $6,125, and homeowners are taking home $7,025 more after housing costs per year.

This is thanks again to rising local incomes, which shot up $7,817 from 2014 to 2017 while median housing costs increased by just $1,080.

Overall, the percentage of a gross median income required to cover Austin’s median housing costs fell by 4.5% over those three years.

5. Portland, Oregon

Portland is No. 5 among cities where incomes have increased the most compared to housing costs in over the past three years. This net gain in dollars is $6,733, reflecting median incomes that increases $7,825 per year compared to a rise of just $1,092 in annual housing costs.

Homeowners in Portland saw the biggest gains; the percentage of the median income required to cover the costs of owning a home fell by 11.2%. In dollars, homeowners here had an average of $7,693 more of their gross income leftover after covering housing costs than three years previous. For renters, this figure is $6,025.

Notably, Portland ranked No. 7 out of 50 in our rankings of the places where Americans live the most balanced lifestyles.

6. Denver

Next is the Mile High City, Denver, where increases in income outstripped the rise in housing costs to grant locals an average of $6,418 more in annual income, after housing costs. This is based on the $7,678 rise in Denver’s median income in the past three years, which outsrippted the $1,260 rise in housing costs during the same period.

Rising rent costs, however, have countered some of the income gains for Denver residents. For workers earning the local median income, the percentage of their pay that would be devoted to rent costs actually rose by 7.7% over three years — the steepest increase of any city we surveyed. Compare that to a 3.1% fall in costs-to-income for homeowners.

7. Boston

Another high cost-of-living city makes the list with Boston. Fortunately, the median annual income was up $7,344 from 2014 to 2017, helping to make up for some of the city’s high costs. Housing costs rose $1,008 per year during the same period.

In all, a typical Bostonian has $6,336 more in gross income leftover after paying for housing, compared to three years ago. This same figure is $5,952 for renters, specifically, and $7,128 for homeowners.

8. Bridgeport, Connecticut

In the city of Bridgeport, slower-rising housing costs are also contributing to a widening gap between housing costs and incomes. Here, annual housing costs are just $432 higher than they were three years ago — the smallest increase in housing costs among the top 10 cities.

That means that more of the $6,610 increase in incomes from 2014 to 2017 will make its way into Bridgeport resident’s pockets being eaten up by housing costs.

In all, the three-year increase in incomes after accounting for housing costs is $6,178 .This number is actually higher for local homeowners, at $7,018, and lower for renters,$5,266.

9. Nashville, Tennessee

Nashville locals have $5,984 more in gross income after paying housing costs today than they did three years ago. Housing costs rose $576 during that time, while incomes were up $6,560.

While this isn’t the highest dollar amount, it reflects a drop of 6.7 percentage points in the ratio of housing costs to income. In other words, Nashville is the top 10 city where locals who saw the biggest increase in the percentage of their income they get to keep rather than pay toward housing.

10. Salt Lake City

Rounding out the list is Salt Lake City, which ranked in the top cities to live out your golden years. Despite a boom in housing costs in the past 15 years, wages in this Utah city have also increased. From 2014 to 2017, the median household income rose $6,309, exceeding the $456 rise in housing costs for a total gain of $5,853 for Salt Lake City locals.

In all, Salt Lake City residents are still coming out ahead, with more money leftover after paying for housing compared to three years previous.

Understanding the metrics

Comparing data from the American Community Survey for 2017 to 2014, analysts subtracted the change in median household income from the change in median housing costs (annualized) to determine the three-year change in gross income left over after paying for housing.

In addition, we also calculated the change in the percentage of income a median household would spend on median housing costs, and then we repeated the exercise for median rents and median costs for homeowners who have mortgages. In all, this generated the following findings for each city:

  • 3-Year change in gross income left over after housing costs (annual)
  • 3-Year change in gross income left over after rent (annual)
  • 3-Year change in gross income left over after homeownership costs, including mortgage (annual)
  • 3-Year change in the percentage of the median gross income required for median housing costs
  • 3-Year change in the percentage of the median gross income required for median rent
  • 3-Year change in the percentage of the median gross income required for median homeownership costs, including mortgage

Scroll to the end of this piece for a table that includes these full study findings for each city.

The median housing cost estimate is inclusive of every household within a Metropolitan Statistical Areas, which may include a city and surrounding communities. The rent estimate is limited to people who pay rent, and we limited the homeownership costs (which includes costs such as taxes and insurance) to those with a mortgage. We excluded homeowners without a mortgage, as their housing costs are likely to stay close to flat and wouldn’t reflect area changes in housing costs.

In several instances, we found that a higher proportion of median income was required to pay the median rent in 2017 than it was in 2014. Even in these cases, the median households brought home more money after paying rent.

Conventional wisdom says that households should spend no more than 30% of their gross income on housing costs. In every metro we reviewed, the ratio of median income required to pay median rent fall comfortably below this line. Yet rents were more likely to have increased on pace with wages, meaning renters saw smaller gains in after-housing income than homeowners.

The ratio of housing costs to income homeowners, however, exceeds that limit in most metros, implying that homeownership is still not affordable for the typical household. Together, these findings suggest that while homeowners’ housing costs rise more slowly than renters’, they must use a large chunk of income to cover those costs than do renters.

Full rankings

Below is a table with the full findings for all 100 cities in our study. After the column listing the city, the leftmost three columns shows the change, in dollars, of gross income left after paying for housing costs. The rightmost three columns show the change in the percentage of the median income needed to pay for the median housing costs in that city.

Methodology

Researchers compared 2017 and 2014 median household income, as well as 2017 and 2014 median housing costs, median gross rent, and median housing costs for homeowners with a mortgage.  The results were aggregated to the 100 largest municipal statistical areas, and the data is from the American Community Survey 5-Year estimates from the U.S. Census.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Elyssa Kirkham
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Elyssa Kirkham is a writer at MagnifyMoney. You can email Elyssa here

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Mixed Race Young Female Agonizing Over Financial Calculations in Her Kitchen.

Updated May 01, 2019
Don’t have a credit history established, or have a low credit score? It can be challenging to find lenders that will approve you if you have a thin credit file or poor credit, but it’s not impossible.

You still have options when it comes to personal loans, and these options come from reputable lenders.

What’s even better is that these lenders will only conduct a soft credit inquiry when you apply to find out what rates they can offer you. This means your credit score won’t be negatively affected, so you don’t have to worry about damaging it further.

In this article we’ll review how to find reputable lenders, why you should stay away from two popular options people turn to when they’re in a poor credit situation: payday and title loans. And what you can do to increase your credit score.

Check for approval without a credit hit

It’s worth noting low scores aren’t always indicative of how responsible you are with credit. A low score, or thin file, could just be a result of a short credit history. If you have a clean history (no late payments, low credit utilization, etc.), you’ll have an easier time obtaining a loan over someone who has had delinquencies on their record, but might have a higher score.

If you have bad (or no) credit, you should apply to as many lenders as possible that use a soft pull to ensure you don’t hurt your credit score. We recommend starting with LendingTree, where you can use one short application form to get rates from multiple lenders at one.

Company
APR
Terms
Credit Req.
LendingTree

As low as 3.99%

24 to 60

months

Minimum 500 FICO®

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree is our parent company

Advertiser Disclosure.

Disclaimer

A Personal Loan can offer funds relatively quickly once you qualify you could have your funds within a few days to a week. A loan can be fixed for a term and rate or variable with fluctuating amount due and rate assessed, be sure to speak with your loan officer about the actual term and rate you may qualify for based on your credit history and ability to repay the loan. A personal loan can assist in paying off high-interest rate balances with one fixed term payment, so it is important that you try to obtain a fixed term and rate if your goal is to reduce your debt. Some lenders may require that you have an account with them already and for a prescribed period of time in order to qualify for better rates on their personal loan products. Lenders may charge an origination fee generally around 1% of the amount sought. Be sure to ask about all fees, costs and terms associated with each loan product. Loan amounts of $1,000 up to $50,000 are available through participating lenders; however, your state, credit history, credit score, personal financial situation, and lender underwriting criteria can impact the amount, fees, terms and rates offered. Ask your loan officer for details.

As of 28-Feb-2019, LendingTree Personal Loan consumers were seeing match rates as low as 3.99% (3.99% APR) on a $10,000 loan amount for a term of three (3) years. Rates and APRs were based on a self-identified credit score of 700 or higher, zero down payment, origination fees of $0 to $100 (depending on loan amount and term selected).

6.95%-35.89%

36 or 60

months

600

SEE OFFERS Secured

on LendingTree’s secure website

Our Commitment We'll receive a referral fee if you click here. This does not impact our rankings or recommendations.

7.69%-35.99%

36 & 60

months

620

SEE OFFERS Secured

on LendingTree’s secure website

We'll receive a referral fee if you apply for this loan. This does not impact our rankings or recommendations.

9.95%-35.99%

24 to 60

months

Varies

SEE OFFERS Secured

on LendingTree’s secure website

Avant branded credit products are issued by WebBank, member FDIC.

6.95%-35.99%

36 or 60

months

640

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

For example, a three-year $10,000 loan with a Prosper Rating of AA would have an interest rate of 5.31% and a 2.41% origination fee for an annual percentage rate (APR) of 6.95% APR. You would receive $9,759 and make 36 scheduled monthly payments of $301.10. A five-year $10,000 loan with a Prosper Rating of A would have an interest rate of 8.39% and a 5.00% origination fee with a 10.59% APR. You would receive $9,500 and make 60 scheduled monthly payments of $204.64. Origination fees vary between 2.41%-5%. APRs through Prosper range from 6.95% (AA) to 35.99% (HR) for first-time borrowers, with the lowest rates for the most creditworthy borrowers. Eligibility for loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All loans made by WebBank, member FDIC.

59.00%-199.00%

9 to 24

months

Varies

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree: Dozens of lenders partner with LendingTree – and many of them may approve people with poor or no credit. You can fill out a simple form and compare multiple offers in minutes. We highly recommend starting your shopping experience here first to have a good chance of getting a loan.

LendingTree
APR

As low as 3.99%

Credit Req.

Minimum 500 FICO®

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Varies

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree is our parent company

Advertiser Disclosure

LendingTree is our parent company. LendingTree is unique in that you may be able to compare up to five personal loan offers within minutes. Everything is done online and you may be pre-qualified by lenders without impacting your credit score. LendingTree is not a lender.


A Personal Loan can offer funds relatively quickly once you qualify you could have your funds within a few days to a week. A loan can be fixed for a term and rate or variable with fluctuating amount due and rate assessed, be sure to speak with your loan officer about the actual term and rate you may qualify for based on your credit history and ability to repay the loan. A personal loan can assist in paying off high-interest rate balances with one fixed term payment, so it is important that you try to obtain a fixed term and rate if your goal is to reduce your debt. Some lenders may require that you have an account with them already and for a prescribed period of time in order to qualify for better rates on their personal loan products. Lenders may charge an origination fee generally around 1% of the amount sought. Be sure to ask about all fees, costs and terms associated with each loan product. Loan amounts of $1,000 up to $50,000 are available through participating lenders; however, your state, credit history, credit score, personal financial situation, and lender underwriting criteria can impact the amount, fees, terms and rates offered. Ask your loan officer for details.

As of 28-Feb-2019, LendingTree Personal Loan consumers were seeing match rates as low as 3.99% (3.99% APR) on a $10,000 loan amount for a term of three (3) years. Rates and APRs were based on a self-identified credit score of 700 or higher, zero down payment, origination fees of $0 to $100 (depending on loan amount and term selected).

Here are 5 personal loan lenders for people who have less than ideal credit (meaning under 700) that will let you check your rate without impacting your credit score:

LendingClub: People with credit scores below 600 may get approved. You can borrow $1,000 – $40,000 and get the money deposited into your account within a few days. Fixed APRs range from 6.95% –35.89% on monthly terms of 36 or 60. LendingClub has an origination fee of 1.00% - 6.00% its loans. LendingClub is not available in Iowa or West Virginia.

APR

6.95%
To
35.89%

Credit Req.

600

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

1.00% - 6.00%

SEE OFFERS Secured

on LendingTree’s secure website

LendingClub is a great tool for borrowers that can offer competitive interest rates and approvals for people with credit scores as low as 600.... Read More

Upstart: Borrow between $1,000 and $50,000 for 36 & 60 months with APRs ranging from 7.69% to 35.99%. While the minimum credit score needed to qualify is 620 (Upstart will also consider applicants who don’t have a score), you must have a clean credit history. You could also be eligible for next day funding.

APR

7.69%
To
35.99%

Credit Req.

620

Minimum Credit Score

Terms

36 & 60

months

Origination Fee

0.00% - 8.00%

SEE OFFERS Secured

on LendingTree’s secure website

Upstart is an online lender created by ex-Googlers.... Read More

Avant: You could borrow anywhere from $2,000 to $35,000 through Avant, and you could receive your funds as soon as the next business day. APRs range from 9.95% – 35.99%. Although the minimum credit score Varies, you have a much better chance if your score is above 580. Avant is available in all states except Colorado, Iowa, West Virginia, and Vermont.

APR

9.95%
To
35.99%

Credit Req.

Varies

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Up to 4.75%

SEE OFFERS Secured

on LendingTree’s secure website

Avant branded credit products are issued by WebBank, member FDIC.

Avant is an online lender that offers personal loans ranging from $2,000 to $35,000. ... Read More

Prosper: Another peer-to-peer marketplace lender, Prosper’s loans are similar to LendingClub’s. You can borrow $2,000 to $40,000 with APRs ranging from 6.95% to 35.99% on 36 or 60 month terms. There’s an origination fee of 2.41% - 5.00%, and its minimum credit score is 640.

APR

6.95%
To
35.99%

Credit Req.

640

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

2.41% - 5.00%

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure

Prosper is a peer-to-peer lending platform that offers a quick and convenient way to get personal loans with fixed and low interest rates. ... Read More


For example, a three-year $10,000 loan with a Prosper Rating of AA would have an interest rate of 5.31% and a 2.41% origination fee for an annual percentage rate (APR) of 6.95% APR. You would receive $9,759 and make 36 scheduled monthly payments of $301.10. A five-year $10,000 loan with a Prosper Rating of A would have an interest rate of 8.39% and a 5.00% origination fee with a 10.59% APR. You would receive $9,500 and make 60 scheduled monthly payments of $204.64. Origination fees vary between 2.41%-5%. APRs through Prosper range from 6.95% (AA) to 35.99% (HR) for first-time borrowers, with the lowest rates for the most creditworthy borrowers. Eligibility for loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All loans made by WebBank, member FDIC.

OppLoans: If you have no or bad credit, Opploans is an online lender that could help. If your credit score is below 0 (or if you have no credit score at all), OppLoans will work with you. You can check to see if you are approved without impacting your score. And – unlike payday lenders – OppLoans offers much more affordable borrowing options. They also have great reviews – with a customer service rating of 4.9/5 stars.

APR

59.00%
To
199.00%

Credit Req.

Varies

Minimum Credit Score

Terms

9 to 24

months

Origination Fee

Varies

SEE OFFERS Secured

on LendingTree’s secure website

There are several other personal loan lenders that will do a soft credit check. You can find them on our personal loan table here. While many of these lenders have minimum credit score requirements, you’ll find they take other factors into account aside from your FICO score.

Additionally, since these lenders only do a soft credit pull, you’re free to shop around for the best rates without fear of damaging your credit score.

Why You need to Stay Away from Payday Loans and Title Loans

Not eligible for personal loans? Don’t turn to payday loans or title loans.

If you’re not familiar with either, you might be wondering what’s so bad about them. After all, they seem convenient – most offer “fast cash,” and if you live in a populated area, you’ll probably find a payday loan or title loan shop nearby.

However, both require you to give something in exchange for funds, and neither require any sort of stringent approval process to ensure borrowers can afford the loans.

Payday Loans

Payday loan companies require you to write a check for the amount you wish to borrow, plus a set fee. The lender holds onto the check until the loan becomes due (typically on the borrower’s next payday, hence the name), and gives the borrower the money they need in the meantime.

The problem? If you can’t pay when the loan balance becomes due, you can choose to extend the term of the loan. When you do, you get hit with more fees. The APR on payday loans is extremely high, so you’ll pay more each time you extend your loan term.

Payday loans are on the smaller side – anywhere from $100 to $1,000. According to PayDayLoanInfo.org, the average term is two weeks, with 400%+ APRs. When you factor in fees, the APR can go up to 780%.

[Stuck in a Payday Loan Trap? Here are the ways out.]

Title Loans

Title loans require you to give your car’s title to the title loan company in exchange for an amount equal to the appraised value of your car. You usually have to own your car outright to be eligible for a title loan, and the term is around 30 days.

Like payday loans, if you can’t pay on time, you may choose to roll the loan over to the next month, incurring more fees. If you can’t pay back the loan at all, you run the risk of the lender repossessing your car.

As you can tell, both of these options are bad ideas if you want to stay clear of getting into a horrible debt cycle. These loans are purposely too expensive for borrowers to afford. If people are looking for quick cash because they don’t have any, it stands to reason they’ll be in the same situation a week or two from the time they borrow.

Non-Profit Credit Counseling to Rebuild Credit Score

You want to make every effort to improve your credit score, even after you’re approved for a loan, because having a good credit score will benefit you in other areas of life. For that reason, you might want to consider teaming up with a non-profit credit counseling service.

These companies can provide you with personalized advice on your specific situation so you can work on rebuilding your credit score. They can also work with your creditors and negotiate on your behalf to possibly lower interest rates or get better terms on your existing debt.

It can be tricky to find a reputable credit counseling agency – even with a non-profit organization. If you’re interested in a credit counseling service, USA.gov lists a few considerations and questions you should ask before committing. You want to make sure the credit counseling agency is actually going to help you get your credit and financial situation under control.

Alternative to Ways to Build Your Credit Score

If you don’t qualify for a personal loan, and don’t want to turn to payday or title loans, there are a few steps you can take to increase your credit score. This post has 6 tips to help get you started. These methods won’t boost your score immediately, but over time, you’ll see an improvement.

The Federal Trade Commission also has 6 alternatives to payday loans on its website, which might apply to your situation. For example, if you’re a member of a credit union, you could inquire about a loan through them as you have an established relationship already.

Also, if you haven’t started budgeting and tracking your spending, you should – doing so can help you spot problem areas with your money.

Read the Fine Print and Shop Around

Regardless of which loan you decide to apply for, always consider the cost. You want to make sure you’re getting the best possible terms, which means getting the lowest APR offered. Typically, cash advances and credit cards are going to have higher APRs than personal loans but lower than payday lenders.

Remember to always read the fine print. Loans of any type have plenty of fees associated with them that you should avoid. Shop around for the best deals and work on improving your credit score so better options become available to you.

*We’ll receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.

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Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at [email protected]

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