2. Pawnshops

For those who are in awful straits, pawnshops are a goldmine as they lend money by holding you stuff as security, but they are widely different from pay day loans as their lending rates are very high. These loans are typically provided for 30 to 90 days at 10 to 20 percent rates and storage fees. The main disadvantage of this type of borrowing is, if you can’t repay the loan on time, the pawnbroker can sell your collateral which is way more worthy than the loan amount. It is more sensible to sell your stuff rather than taking such a dumb loan.

3. Friends and Family

It is more tempting to borrow a loan from someone you know. After all your friends and family are not going to charge you the interest or possess any of your stuff if you don’t pay them back. Then why it is bad to take a loan from them? In case the deal goes bad, you may lose the good relationship with them what you have now. This risk may linger you in a long term, so first decide what you need more? The money or the relationship?

Also Read: 5 Secrets of Warren Buffett's Success