An emergency course can come from different places. Ideally, you had an emergency fund – so you’ll just borrow it yourself. If not, you may need an urgent cash loan. This site describes several ways to get money when disaster strikes.
A bank or credit union should be your first choice if you get a loan. Other lenders may promise fast money and easy approval, but these promises often come at a cost (usually high-interest rates and adverse conditions).
You can get emergency cash loans from a bank in different ways:
- The charge on your credit card
- Home equity loans
- Home equity line of credit
- Unsecured credit (or “signature” credit)
When applying for loans, remember to look at credit unions. You can get more personalized attention at the credit union so you have a better chance of getting approved (while a big bank will only look at data from your credit application.
Before you borrow, think carefully about any type of collateral you will pledge for a loan. Investing in a property such as your home (if you are using a home equity loan or a line of credit) means you are taking a risk.
But the bank takes less risk, so you can get more credit with lower interest rates. Start by looking at unsecured personal loans and just pledge collateral if you need it.
Consider the worst-case scenario: if this situation gets worse and you are unable to repay the loan, what happens?
By placing the house on the line, you have made it available to your creditors. It is best to borrow without putting risky assets at risk (when that option is available).
A little help from your friends
Instead of going into debt for an emergency cash loan, consider talking to your network of friends and family.
If you have suffered difficulties, they may be willing to help. Of course, don’t be offended if you don’t get money from them – giving them a loan can be riskier than they can afford. Remember, they could end their emergency every day.
You can also borrow from strangers. Peer to Peer Lending sites connect you to individuals (and sometimes institutions) who are willing to lend money – in many cases, on terms that are more favorable than you would find with a bank.
Payday Loans – Dangerous Emergency Cash Loans
If you do not have enough credit and income to qualify for a loan, traditional borrowing may not be an option. As a last resort option, paid loans can help you get through difficult times. But it’s impossible to overestimate this: payday loans are dangerous, and things can easily end badly when you use them.
You really need to be careful about using a payday loan. The problem with them is that they are most likely to make your situation worse. An emergency cash loan is like a band-aid – it won’t cure you, and sooner or later it will fall. Plus, it won’t keep you in the future. Remember that loan loans can easily cost you several hundred percent APR.
In other words, they are extremely expensive loans (and if you did not have the income and credit to qualify for a traditional loan, how would you repay the expensive and repaid loan)?
Title loans are a similar type of high-quality loan. You can get some money, but you risk losing important assets like your car. If you lose a car, will you lose your ability to find a job and earn income?
Alternative cash loans
Lastly, you need to have an emergency fund. If you don’t have one today, make one for next time. Then think about your property.
Can you sell something (or a few) to cover the cost of this emergency? This will be a much better option than taking on debt. Think about the possibilities: you may have a nice TV, car or couch that you enjoy.
You can sell the item and get out of the situation relatively smoothly, or you could repay the debt for several years (or more). If you use a payday loan, you might spend a lot more than you borrowed in the first place (and it may be more than it costs to buy a brand new TV).