How to weigh your options for a short-term loan

Here's a look at your best options for a short-term loan.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• IRA
• 401K
• home-equity loan
• personal loan
• credit card

1. 

   BORROW FROM YOUR IRA
   
   Pros: Pentalty and tax free for 60 days (or longer for certain reasons)
   
   Cons: Repay within 60 days or you owe taxes and federal and state charges.
   
   Best choice if: You have an IRA and are for sure you'll be able to repay in time.

2. 

   BORROW FROM YOUR 401(K)
   
   Pros: No tax or penalty. Intersted is paid back to you.
   
   Cons: Don't pay it back in time, and you'll owe tax and penalty.
   
   Best choice if: It's your only savings and you know you can repay the loan.

3. 

   HOME EQUITY LOAN
   
   Pros: Low, tax-deductible interest.
   
   Cons: Your house is the collateral.
   
   Best choice if: You need some time to pay off the loan.

4. 

   PERSONAL LOANS
   
   Pros: Interest rates can be reasonable
   
   Cons: Rates are higher w/out collateral.
   
   Best choice if: You don't have home equity.

5. 

   CASH ADVANCE FROM CREDIT CARDS
   
   Pros: Easy, convenient, no time limit for paying it off.
   
   Cons: Costly. Interest is around 20% and you normally pay a fee of 3%.
   
   Best chioce if: You plan to pay it off w/in 30 days so intersted doesn't build up.

Tips & Warnings

• I'm not a money pro, I've just learned some of this from reading various books. Use caution when it comes to your money!

[ccharles1]

on 10/7/2008 I can vouch from experience- seems like you are right on!

[brandy1123]

on 9/18/2008 good advise