Most of us have had times in our life when we direly needed extra cash on hand to manage unexpected expenses, like a car repair bill or a medical bill. While having a short term savings account is ideal, sometimes expenses pile up for even the best prepared among us, or there simply aren’t the funds available to create a savings account. If faced with a bill you cannot pay, you may want to speak with the creditor about making reasonable payments. Many creditors will work with customers and clients if you simply do not have the money, and this can alleviate your financial crisis without borrowing money. What are your options when you have to have cash in a hurry?
If you have savings or even a 401K, you may be able to cover unexpected expenses this way. Many employers will allow you to borrow from your 401K in the case of an emergency with limited penalties. Draining your savings account to cover an emergency is frustrating, but nonetheless better than many of the alternatives.
If you have credit cards available, or a family member to borrow from, using these options can help you deal with a need for urgent cash. While credit card cash advances are typically expensive, they are less expensive than payday or cash advance loans. If your credit is good, you may be able to quickly obtain a credit card or a personal loan from your bank or credit card with enough speed to meet your needs. This is often the most affordable way to put your hands on cash in a hurry. If you have an understanding employer, or are a college student, a short term loan may be available through these organizations.
Emergency loans are available from a variety of lenders. While all such loans will come with high interest rates, some may be more affordable than others. It is critical that you carefully read all loan terms, including interest rates, prepayment penalties and more. Some reputable banks, like CitiFinancial, offer emergency loans to those in need with some amount of established credit or a willing co-signer. These loans are typically quite stable and have moderate interest rates, depending upon the borrower’s credit rating.
Finally, when all other options are exhausted, there are payday loans, also called cash advance loans. You may well have heard news stories or other information about payday lenders and their unethical lending practices. The reality is that the news stories are true. Payday loans come with interest rates ranging from 390% to 780% APR. If you have no alternative, borrow only what you can afford to pay back with your next paycheck, and make this the absolute last resort.