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It’s not always possible to cover an expense — whether planned or unexpected — with cash you have on hand.
Among employed Americans, 8% say they don’t regularly save any money from their paychecks, according to a NerdWallet survey conducted online in March 2026 by The Harris Poll.
If you don’t have the cash upfront, there are several options for borrowing — each with its own pros and cons. Let’s explore the different ways to borrow money and when each option is best.
Breaking down the best ways to borrow money
There are multiple ways to borrow money — whether you’re looking to get quick cash, to spend the least amount on interest or you have another goal in mind.
The following lists highlight the best borrowing methods for various situations. You’ll find some borrowing types on more than one list. For example, personal loans from online lenders are great for fast funding, large loan amounts and applicants with low credit scores.
After you discover which loans work best in which situations, read on to learn more about each borrowing type.
Fastest ways to borrow money
- Personal loan from an online lender.
- Cash advance app.
- Cash advance from a credit card.
- Buy now, pay later.
- Pawnshop loan.
Cheapest ways to borrow money
- Personal loan from a credit union.
- 0% APR credit card.
- Buy now, pay later.
- 401(k) loan.
- Loan from family or friends.
- Home equity financing.
Best ways to borrow with a low credit score
- Personal loan from a credit union.
- Personal loan from an online lender.
- Cash advance app.
- Buy now, pay later.
- Pawnshop loan.
- Loan from family or friends.
Best ways to borrow small amounts
- Personal loan from a credit union.
- Cash advance app.
- Cash advance from a credit card.
- Buy now, pay later.
- Pawnshop loan.
- Loan from family or friends.
Best ways to borrow large amounts
- Personal loan from a bank.
- Personal loan from an online lender.
- Home equity financing.
- Personal line of credit.
Personal loan from an online lender
Best for: Borrowers across the credit spectrum looking for medium to large loan amounts with quick, convenient funding.
Online lenders boast convenience and speed compared to traditional lenders like banks or credit unions. Many online lenders can fund personal loans as quickly as the same day you’re approved or the following day.
Online lenders often cater to a wide variety of consumers, including borrowers with bad credit (a score below 600). However, if you have a low credit score, your loan may have an annual percentage rate (APR) on the higher end of the lender’s range — which typically tops out at 36%.
Some online lenders have a one-time charge called an origination fee. This fee often ranges from 1% to 10% of the total loan amount and is usually deducted from your loan before the lender sends you the funds. You may need to increase your requested loan amount to cover the cost.
Loan amounts typically range from $1,000 to $50,000 or more, and repayment terms often range from two to seven years.
» MORE: Best online loans
Pros
Fully online application process.
Same- or next-day funding may be available.
Borrowers with fair or bad credit may qualify.
Cons
High APRs for fair- and bad-credit borrowers.
Potential origination fee.
Personal loans from our partners
SoFi 
APR
7.74-35.49%
Loan Amount
$5K-$100K
LightStream 
APR
6.49-24.89%
Loan Amount
$5K-$100K
Best Egg 
APR
6.99-35.99%
Loan Amount
$2K-$50K
Personal loan from a bank
Best for: Borrowers with good or excellent credit seeking medium to large loan amounts.
Banks tend to offer lower APRs for personal loans than online lenders. Some provide rate discounts to existing customers. If you don’t have good credit, however, it may be hard to get approved through a bank.
Loan amounts typically range from $1,000 to $50,000 or more with repayment terms ranging from two to seven years.
» MORE: Best bank loans
Pros
Lower APRs than online personal loans.
Potential rate discounts and other perks for existing customers.
A wide range of loan amounts and repayment terms.
Cons
May need good or excellent credit to qualify.
Personal loan from a credit union
Best for: Credit union members needing low-cost loans.
Credit unions are more likely than banks to approve loan applicants with bad credit. Loan officers may consider your overall financial picture, instead of relying heavily on your creditworthiness.
If you need to borrow a small amount, credit unions are your best bet at getting a personal loan under $1,000.
Also, federal credit unions cap rates at 18%, making them some of the best options for a personal loan with a low APR. But you’ll need to become a member before getting a loan from a credit union.
Pros
Lower APRs than other types of personal loans.
Small loan options are available.
Cons
Must become a credit union member.
Cash advance app
Best for: Covering small emergency expenses in between paydays.
If the amount of money you need is a few hundred dollars or less, cash advance apps provide small advances on your paycheck with no hard credit inquiry. The borrowed amount is often automatically deducted from your account on your next payday.
You may be able to request an instant advance, but you’ll likely pay a fee for expedited service. Typical no-fee funding times are between one and three days.
Many cash advance apps charge a subscription fee or ask for an optional tip.
Pros
Option to receive cash instantly.
No hard credit pull.
Cons
May charge fees.
Short repayment terms.
Small borrowing amounts.
May lead to repeat borrowing.
Cash advance from a credit card
Best for: Credit cardholders needing quick access to cash without undergoing a loan application process.
You may also have access to cash advances through your credit card. Think of it as using your credit card to "buy" cash rather than goods or services.
Cash advances can be capped at a few hundred to a few thousand dollars, but they’re quick and easy to get. If your credit card has a PIN, simply visit an ATM to withdraw. If you don’t have a PIN, take your card and ID to a bank that offers advances through your card's payment network, such as Mastercard or Visa. You might also be able to write a convenience check to access funds.
Though they’re a fast way to get money in your hands, credit card cash advances are costly. You will likely encounter a combination of cash advance fees, ATM or bank fees and a higher interest rate than what you pay to make purchases. Also, the interest starts to accrue immediately.
Pros
No application or approval process if you already have the card.
Provides quick access to cash.
Cons
High fees.
Interest accrues immediately.
Borrowing amounts may be low.
Loan from family or friends
Best for: Individuals with a personal connection to someone who is willing and able to lend them cash to meet a financial need.
Potential awkwardness aside, asking a loved one for a loan eliminates the need for a formal application and approval process. Having bad credit doesn’t prevent you from getting a family loan.
However, your relationship can be damaged if you don’t repay the loan as expected. Before you borrow from a family member or friend, create a loan agreement with mutually agreed-upon terms, including any interest and a repayment schedule, so both parties are on the same page. Sign and notarize the document.
Pros
No formal application or approval process.
Potentially no or low interest.
Cons
Can lead to personal conflict.
Pawnshop loan
Best for: Small, quick loans for borrowers that can offer an item of value as collateral.
Like a secured loan from a bank, a pawnshop loan requires you to put up an item as collateral. Think jewelry, antiques or electronics. Once you bring the item in, the pawnshop assesses its value, condition and resale potential and makes you an offer, usually about 25% to 60% of the item’s resale value.
If you accept the loan, you walk away with the cash and a pawn ticket. Upon repayment, you can collect your item. If you fail to repay by the deadline — often 30 to 60 days — the pawnshop keeps it.
A pawnshop loan can be a quick way to borrow money without requiring an approval process based on your credit score. However, in addition to interest, some pawnshops charge fees for storage, appraisal and insurance, which can result in an APR over 200%.
Pros
No application or approval process.
Immediate access to funds.
Cons
Potential to lose a valuable item.
Short repayment terms.
High rates.
0% APR credit card
Best for: Good- to excellent credit borrowers who may need repeated access to money and are able to repay the funds in under two years.
A 0% APR credit card can be one of the cheapest ways to borrow money if you pay off the balance within the card’s zero-interest introductory period — typically 15 to 21 months. You often need good or excellent credit to qualify.
Say you use a 0% APR credit card with a 15-month introductory period to cover an unexpected expense like a medical bill or car repair. If you pay off the balance nine months later, you’ll have borrowed that money without having to pay interest.
» MORE: Best 0% APR credit cards
Pros
Pay no interest on purchases during the introductory period.
The card may include special perks like cash back or travel rewards.
Cons
Need good or excellent credit.
Must repay the balance in a short period.
Buy now, pay later
Best for: Breaking up a large retail purchase into smaller payments over a couple of months.
You can purchase items now and pay for them over several weeks, usually without interest or fees, using a "buy now, pay later" plan. Many major retailers partner with BNPL companies to offer these payment plans at checkout.
If you get a zero-interest payment option, buy now, pay later is a no-cost way to borrow money for necessary expenses. These plans can also be appealing because most don’t require a hard credit check. But because they’re easy to get, BNPL plans can also lead to overspending.
» MORE: Compare buy now, pay later apps
Pros
No interest or fees with some plans.
Offered at many major retailers.
Usually no hard credit check.
Cons
Some plans may charge interest or fees.
Can lead to overspending.
Short repayment periods.
401(k) loan
Best for: Individuals with healthy retirement accounts who are likely to remain working for their current employer throughout the repayment period.
A 401(k) loan allows you to borrow up to half the vested balance in your retirement account or $50,000, whichever is less. Unlike with a 401(k) withdrawal, you don’t have to pay taxes and penalties on a loan as long as you stick to the repayment terms. You typically have five years to repay the loan.
These loans offer some of the lowest rates available. Interest on a 401(k) loan typically equals the prime rate — the benchmark that is used by banks to set rates on consumer loan products — plus one or two percentage points. Also, the interest you pay goes back to your retirement account.
401(k) loans don’t require a credit check, and missed payments aren’t reported to the credit bureaus. However, if you default on a 401(k) loan, you’ll typically owe taxes on top of an early withdrawal penalty (if you’re younger than 59 ½).
One major downside of a 401(k) loan is that it decreases your retirement nest egg and its potential growth. And if you leave your job before the funds are repaid, you may have to repay the remaining balance quickly to avoid penalties.
Pros
Borrow money from yourself instead of a third party.
Low interest rates.
Interest paid goes back into your retirement account.
Missed payments do not hurt your credit score.
Cons
Reduces retirement nest egg and its ability to grow.
May have to repay the loan quickly or face penalties if you leave your job.
Personal line of credit
Best for: Repeated borrowing access over several years.
Personal lines of credit are offered by some banks and credit unions and behave like a hybrid between a loan and a credit card. Good- or excellent-credit borrowers likely have the best chance of getting the lowest rates.
With a personal line of credit, the lender approves you for a specific credit limit, and you draw funds from that credit line as needed. You only pay interest on the amount you borrow. You can continue borrowing funds and paying down your balance during the draw period, which may last up to five years.
After that, you enter the repayment period. You start making monthly payments and you’re no longer able to borrow additional money. The repayment period might last up to 10 years.
This can be ideal for borrowers who aren’t sure how much they need to borrow initially or who plan on needing repeated access to funds.
Pros
Draw money based on what you need and pay interest only on what you use.
Credit limit replenishes as you make payments.
Ideal for those who are unsure of total borrowing needs.
Cons
Need good or excellent credit.
Home equity financing
Best for: Homeowners who want large loan amounts, low interest rates or long repayment terms.
If you’re a homeowner, you may qualify for a home equity loan or home equity line of credit (HELOC). Both options allow you to borrow against your home’s value, minus what you owe on the mortgage. Your home serves as collateral, and you can expect lower interest rates than unsecured loans or credit lines.
These options are best used to fund projects that increase the value of your home, but you aren’t restricted to only using them for home improvement purposes.
With a home equity loan, you get a lump-sum payment, which you’ll repay over a period up to 20 or 30 years.
With a HELOC, you’ll only withdraw and pay interest on the money you need, similar to a personal line of credit. You can access the funds during the draw period, which is typically 10 years. Then, you’ll repay the money over a term of up to 20 years.
Pros
Lower interest rates than unsecured loans or credit lines.
Long repayment periods.
Cons
Risk losing your home if you don’t make payments on time.
Long funding timeline.
Will likely need to pay appraisal fees and closing costs.
What to consider when borrowing money
Here are five things to weigh when choosing the best borrowing method for you.
- Annual percentage rates. APR represents the total cost of borrowing money. Use it to compare the costs of various borrowing options.
- Loan amount. Different lenders have different minimum and maximum loan amounts. Determine how much money you need to borrow, and look for lenders that offer that amount.
- Lending requirements. Consider the lender’s credit score and income requirements, and inquire whether you need to put down collateral to secure the loan. Some lenders — like credit unions and some banks — only provide loans to existing customers, so keep that in mind.
- Payment amounts. Make sure that repaying what you borrowed won’t cause you to fall behind on your other bills. If you’re considering a loan, use NerdWallet’s personal loan calculator to estimate your monthly payment amount.
- Funding time. Some borrowing methods provide cash immediately or within a day, while others can take a week or longer. Consider how soon you need the money, and select a lender that can match your desired funding time.
Borrowing options to avoid
Payday loans
A payday loan is a type of small, short-term loan that’s meant to be repaid with your next paycheck. While you can get cash almost instantly with no credit check, payday lending is extraordinarily costly and should be a last resort. Loans can cost $15 for every $100 borrowed, which amounts to an APR of 391% for a two-week loan. Most consumer advocates recommend loan APRs to be no higher than 36% to be considered affordable.
Research from the Consumer Financial Protection Bureau has shown that most payday loan borrowers end up paying more in fees than they originally received in credit, creating a cycle of debt.
High-interest installment loans
High-interest installment loans may have longer repayment terms than payday loans, but they have interest rates above 36%.
For example, a $1,000 loan with a six-month term and a 60% APR would cost $182 in interest. The same loan with a 20% APR would cost $59 in interest.
It’s best to avoid high-interest installment loans if possible, as high APRs can make it difficult to pay these loans off.
