Financial crises have a habit of catching you off guard. You can't always plan for an emergency expense, a loved one requiring expensive medical treat
Financial crises have a habit of catching you off guard. You can’t always plan for an emergency expense, a loved one requiring expensive medical treatment, or a sudden change in your family’s financial situation.
The idea of immediately raising funds might be intimidating. And acting too soon, without evaluating all of your choices, might result in costly financial blunders. So, we put up this guide to help determine where to search when you need money. These techniques are intended to help you get the cash you need today while causing as minor damage to your long-term financial health as possible.
Best quick ways to get emergency cash
Here are some of the most common financial solutions for those in need:
Request a payroll advance
You can request a payroll advance from your employer and use it as an emergency fund. This is an excellent way to get cash in a pinch without having to borrow from friends and family, which can be embarrassing and uncomfortable if they don’t have the kind of money you need.
Sell unused gadgets
If you’re looking for quick and easy ways to get emergency cash, you can sell your old and unused electronics.
The beauty of this method is that it doesn’t require any time or effort on your part—you just need to have the right devices to sell and an internet connection.
You can sell your old cell phones, laptops, or tablets by posting ads online or going door-to-door in your neighbourhood asking if anyone is interested in buying their latest device. You may also be able to sell them at a local pawn shop or flea market if you don’t mind driving around town.
Take Out a Personal Loan
A personal loan is an option if you need money right now. Personal loans are used by borrowers who need larger amounts of cash that can be repaid over longer periods of time, often between 1 and 7 years. Furthermore, individuals with good credit obtain the best interest rates. Equifax’s credit score of 622 indicates solid credit. It demonstrates that you have a solid financial history and are a less risky borrower. Lenders will also do a credit check especially if you take out an unsecured personal loan.
If you want to take out a personal loan, there are several lenders and financial institutions that offer easy emergency loans online applications that you can check out.
Use a Credit Card
Using a credit card for emergency needs comes with a big caveat: you should only use it if you’re certain you’ll be able to pay off the entire balance before it starts collecting interest, which is usually before your next payment due date. (If you have a credit card with a 0% interest rate for a limited time, make sure you pay it off in full before the 0% rate ends.)
Credit cards frequently have high-interest rates. That is why having credit card debt is the financial equivalent of playing with fire. Be cautious with this selection, and if it isn’t a good match, proceed to the next
Takeout a Payday Loan
You also have the option to take out a payday loan for emergency cash. Payday loans are a type of finance that offers short-term loans with payback terms ranging from 16 days to 12 months and often ranging from $50 to $2,000. Payday loans are easier to arrange since they do not require any collateral. Payday lending companies are likewise less concerned with their customers’ credit ratings and credit history. This makes them an appealing option for persons with bad credit who are unable to get traditional forms of financing such as personal loans.
Use Savings Account
If you have some money saved up in a bank account like a savings account, it might be worth it for you to use that money to use for emergencies instead of getting into more debt.
If you have any money sitting in your savings account, there are a few ways to get it out and spend it on whatever you need. You can do this either by sending a wire or check or by going into the bank and withdrawing cash in person.
Use Retirement Account
You can use your retirement accounts as a way to get fast cash or funds when you need them most. The good news is that this type of investment isn’t as risky as other types, such as stocks or bonds, so there’s less chance of losing money if things go wrong. You’ll also have access to the money you need anytime you want it.
Pawnshop loans are not always a good method to borrow money. However, they are quick, and if you are unable to repay the loan, the pawnshop simply retains the item used as collateral. That’s a lot better than having your credit wrecked and receiving calls from debt collectors. Instead of borrowing against an item, you may typically sell it straight to a pawnshop. Jewellery, musical instruments, guns, and modern gadgets perform the best.
Borrow against life insurance
If you have a cash-value life insurance policy, also known as permanent life insurance, you can borrow against it and return it throughout your life. If you do not repay, the insurance company deducts the amount from your death benefit. However, the more popular kind of life insurance, term life, cannot be used as collateral for a loan.
How to choose the right lender for emergency cash loans
Instead of taking the first loan, you come across, shop around with different lenders to locate the best one for you. Consider the following aspects while selecting an emergency personal loan:
- Interest rates: Look for a loan with the lowest interest rates so you may pay the least amount of money in interest. Taking the effort to search for a loan with a low-interest rate might save you a lot of money throughout your loan.
- Lender requirements: Because each lender sets its rates and terms, it’s important to compare many offers to get the best one for you. Consider the requirements for obtaining the loan. Although most lenders do not advertise a specific credit score, some will specify the minimum credit score required to qualify. In most circumstances, your credit report has a significant influence on your ability to qualify and the rate you receive.
- Time before you can get the money: You’re probably looking for a quick loan, so find out how long it will take the lender to put funds into your account. Some lenders will handle your application the same day you apply, while others could take days or even weeks.
- Repayment terms: Check any loan-related costs, such as disbursement or late payment penalties. Because some lenders deduct the disbursement cost from your loan amount, you may need to seek a bigger amount than you need to compensate for this fee.
The Bottom Line
The bottom line is that there are a lot of financing options if you need emergency cash.
How much emergency cash you need depends on your situation, so it’s important to consider what you can afford to pay back. If your emergency is short-term and you have some money saved up, then paying back the loan early may be a great option for you.
If your emergency happens longer term and your finances are stretched thin, then applying for a loan may not be a good idea. It might be better to focus on getting through the rest of the year with just what you have access to rather than worrying about paying back an emergency loan._________________________________________________________________________
Marjorie Hajim is the SEO Manager for Friendly Finance. Friendly Finance is a leading loan matching service in Australia specialising in consumer finance. She loves growing businesses with a focus on their online presence and is passionate about organic growth and all things digital. She has written articles for Coinpedia, MoneyVests, HomeBusinessMag, & many more!