Emergency expenses can come out of the blue at any time. From an unexpected auto repair to a sudden job loss,
there are plenty of situations where you may need an emergency loan as quickly as possible. Here are five ways you can borrow the funds you need when you’re in a financial pinch.
Personal loans can provide you with anywhere from $1,000 up to tens or even hundreds of thousands, depending on a range of factors such as your job status, credit score, debt-to-income ratio, etc. These loans are relatively common and available through most banks, credit unions, and online lenders. They offer reasonable, fixed interest rates so that you can make predictable payments over the life of the loan – typically anywhere from two to seven years.
Personal loans may be secured or unsecured. Secured loans will require collateral (something of value like a vehicle) to secure the loan. Unsecured loans do not require collateral but may have stricter qualifications and may also carry higher interest rates to offset the lender’s risk.
Most major credit cards have a feature called a cash advance which provides immediate access to funding, subject to how much of your credit line is available. With a PIN, you can use a credit card at an automated teller machine (ATM) card to withdraw cash or present the card at a teller’s window at a bank accepting the card. These kinds of withdrawals will require authorization from the card issuer but you won’t have to fill out an application and go through a loan approval process. How much you can withdraw depends on your available credit limit and your card issuer’s terms.
However, any funds withdrawn as a cash advance will start to accrue daily interest, usually from the day you make the withdrawal. These charges can be higher than the standard purchase annual percentage rate (APR) for your card, so it’s in your best interest to repay a cash advance as quickly as possible. In addition to the APR cost, card issuers typically charge a one-time fee that may be a flat fee amount or a percent of the total cash advance amount.
A payday loan is a short-term loan for which the lender essentially gives the borrower an advance on their next paycheck. The borrower then has about two to four weeks to pay it back.
Payday loans can offer an immediate solution for people who need cash but don’t have a good credit or banking history. However, these loans are notorious for having relatively high APRs (as much as 400%), as well as the threat of being caught up in a debt cycle, where payday lenders roll over the loans for an additional fee when the borrower has trouble paying. Many states also have strict rules about the interest, fees, and terms of payday lending, so payday lenders may not operate in all states. Check your local laws and rules about payday lending near you.
A title loan is another way for people with a poor credit history to access instant funding. This is a secured loan for which the borrower must sign over their vehicle’s title in exchange for a lump sum payment. The borrower will then have between 15 and 30 days to pay it back or risk losing ownership of their vehicle. According to the Federal Trade Commission, title loans typically range from 25% to 50% of the vehicle’s value.
Similar to payday loans, title loans are infamous for having high charges. Annual interest rates can sometimes be in the triple digits. However, they are an option for people who’ve been turned down for a traditional loan or credit card.
When all else fails, you may be able to rely on your family and friends to help you out when you’re in a pinch. Though it can feel embarrassing, these are the people who care and want the best for you.
If you do use this option, be sure to pay them back on time and in full. The last thing you’d want to do is betray their kindness and let money ruin your personal relationship.
When facing a financial challenge, you may need to get an emergency loan fast. Start by considering a personal loan or cash advance. For borrowers who don’t have good credit or no credit history, a payday loan, title loan, or assistance from family and friends may offer immediate help.
Notice: Information provided in this article is for information purposes only and does not necessarily reflect the views of articlesfactory.com or its employees. Please be sure to consult your financial advisor about your financial circumstances and options. This site may receive compensation from advertisers for links to third-party websites.
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