From time to time, just about everyone encounters financial difficulties and surprises that make them run low on cash. If it’s happened to you, you know how stressful it can be. Luckily, there are more ways to obtain fast cash than ever. Still, you shouldn’t take the first loan that you can find. In general, it’s best to avoid taking loans entirely. If you must, it pays to investigate the available options and to select the one that best suits your needs and budget.
Always Shop Around when Borrowing Money
When it comes to borrowing money, the first rule of thumb is to shop around. Interest rates vary from lender to lender and from loan type to loan type. They also, of course, vary depending on your creditworthiness. If you have no credit or bad credit, it’s especially important to comparison shop. When taking out a $1,000, three-year loan with average credit, a credit union typically charges around 9 percent, so you will pay around $1,150. On the other hand, a no-credit-check loan can charge around 200 percent interest, which means that you will pay more than $6,000 to repay it.
Delay Expenses if Possible
Before pursuing a loan when you’re short of cash, see if you can hold off until your next payday. If you’re going to be late paying a bill, call your creditor to see if alternative arrangements can be made. You can always ask your employer about getting an advance on your next paycheck or see if they offer loan assistance programs. Don’t forget to check with friends and relatives too.
Get Cash Today
If you legitimately need cash as early as today, some of the available options include:
- Credit Card Cash Advances – If you have a credit card that lets you take cash advances, proceed with caution. This option lets you withdraw an advance from an ATM; the cap is usually a couple of hundred dollars. However, the interest rate is typically much higher than the standard APR–often 20 percent or higher–and creditors usually charge cash-advance fees of 2 to 5 percent on top of that. If you borrow $1,000 at a 25-percent rate and are charged a 3-percent fee, you will repay around $1,430 plus a $30 fee.
- Payday Loans– Payday loans and no-credit-check installment loans are fast and easy to get, and they can usually be obtained online. No credit check is needed for either, but you will need a bank account and a regular paycheck. For both options, you can be charged upwards of 1,000 percent in interest. With the no-credit-check installment loan, you get more time to pay, which also means paying even more interest.
- Online Personal Loan – While online personal loans aren’t usually “instant,” they are often funded within a single day. The highest APR for this type of loan is around 36 percent, so it tends to be more affordable. Your credit is considered, but they take other factors into account too. Therefore, even if your credit isn’t great, you may still qualify. Make sure to have your paperwork in order before applying.
Get Cash within a Week
If you need cash within about a week or so, you’ll have more options at your disposal. The vast majority of online lenders process loans within one to three business days. You can easily shop around across multiple vendors through a marketplace or portal, where you apply once and receive offers from multiple lenders. Remember that your APR will be based on your creditworthiness and will vary from lender to lender.
Get Cash in a Week or More
If you can hold off for at least a week, a credit union personal loan may be optimal. You don’t necessarily need to be a member of a credit union to qualify. Credit unions offer small dollar loans as well as signature and unsecured loans, and online applications are usually available. They tend to be more personalized and will work with you to ensure that your loan is affordable.
As you can see, you are far from out of luck if you need cash within the foreseeable future. There are plenty of quick ways to borrow money, but you are better off avoiding big banks and sticking with the options above. Take steps to avoid finding yourself in this predicament in the future by establishing an emergency fund. Aim to save around three to six months’ worth of expenses to have a good cushion.