It can happen to anyone – an unexpected expense leaves you strapped for cash, or worse, scrambling to generate funds. Your child is sick; your car’s transmission blows, or maybe you’ve lost your job and you are wondering how to make next month’s rent or mortgage payment. If you cannot depend on family or friends, where can you turn for help? Your resources for emergency cash vary depending on whether you have a few weeks or only a few days to raise the funds you need. Some options are relatively benign; others present potentially serious perils to your financial future.
1. Online or Yard Sales
You’ve got stuff you never use or stuff you don’t use anymore. Why not sell it? Post an ad online or host a good old-fashioned yard sale. You may surprise yourself by how much money you raise. As a bonus, you’ll clear the clutter out of your house or apartment.
2. Odd Jobs
Kids have been mowing lawns, shoveling snow, babysitting and even running errands forever to raise cash. If your back is against the wall, consider taking on odd jobs to raise cash. Offer to walk your neighbor’s dog or clear the sidewalk after a snowstorm. Be prepared with the equipment you need to start right away.
3. CDs, Bonds or Stocks
Cashing in investment instruments is not an ideal means of obtaining cash. But if you’re facing an emergency and you have the resources available, they are better sources than other possible options. Be forewarned that cashing in CD’s, bonds or stocks may require you to pay taxes or even tax penalties – especially if those funds were invested for your retirement. You are also unlikely to walk out of your bank or investment broker’s office with cash, so they’re not the best choice if you need money TODAY.
4. Life Insurance Policies
If you have held a whole-life insurance policy for several years, you may have built up equity that you can borrow against. And since it’s a loan you won’t have to pay taxes. But withdrawing money from a life insurance policy reduces the amount of cash available for payout. As an alternative, you can cash out your policy altogether, but you might incur tax obligations on any proceeds over and above what you’ve paid in premiums.
5. Overdraft Loans
Your bank or credit union may offer overdraft protection on your checking account. You probably won’t be able to write a check for CASH, but you may be able to pay a bill with a check or debit card that would otherwise bounce. Overdrafts allow you to purchase groceries when there’s no food in the house or to pay a utility bill to prevent having your services shut off. But many financial institutions charge high interest rates on overdraft loans. And if you don’t pay the loan back, you could lose your account.
6. Home Equity Loans and Reverse Mortgages
If you need a relatively large amount of money, you may be able to borrow against the equity of your home. Since the housing bubble burst, home equity loans are much less common than they used to be, but they haven’t gone away. Seniors who own their homes may also be eligible for reverse mortgages, which almost always have the advantage of not requiring monthly payments while the owners remain in the home. But home equity loans and reverse loans must be repaid, either by homeowners or their heirs – or else the house may be lost.
7. Charitable Organizations
If you truly find yourself between a rock and a hard place, you may be able to obtain financial assistance through charitable organizations such as Catholic Charities or the Salvation Army. Religious organizations often supply aid regardless of your affiliation. Some local municipalities may also offer assistance to residents in need. Be forewarned: obtaining charitable assistance often requires significant effort, substantial documentation and considerable time – often weeks and sometimes months.
8. Credit Card Advances
If your credit cards are not maxed out and you need a relatively small amount of cash, a credit card advance qualifies as a “least bad” option. Credit card companies charge steep interest rates on cash advances. If you miss a payment, you may incur penalty interest rates or the credit card company may close your account. But if you are reasonably sure that your can repay the loan before the closing date, credit card advances can provide a much-needed source of cash – quickly.
9. Pawn Shop Loans
Pawn shops provide no-questions-asked loans with no restrictions on how you use the money. So Aunt Mildred’s fur coat can keep you warm by fetching a large enough loan to cover your heating bill. But pawn shops only lend a fraction of what your items are worth. They also charge sky-high interest rates. And if you fail to repay the loan, you lose your possessions.
10. Personal Installment Loans
Installment Loans offer you quick cash support at the most needed times when you have financial emergencies and you are short on funds. These types of financing are designed for needy borrowers and they can select an amount of their choice with installment repayment terms. People can easily get these types of cash loans without facing any restrictions or getting involved in formalities. They can use these finances frequently to deal with all types of financial emergencies over the long period of time as there are multi-purpose loans.
11. Payday Loans
Payday loans are included dead last on this list because conventional payday loans are the least desirable option for obtaining cash. The convenience of obtaining funds instantly at a payday loan store or the next business day as a deposit into your bank account without a credit check can fee like a great relief. But a few days or a couple of weeks later, you are faced with the prospect of repaying the loan, plus hefty interest charges. If you cannot pay in full, you get sucked into the trap of renewals, partial payments that make little or no dent in what you actually owe.
But if your back is against the wall and you have absolutely no other resources, proceed with caution. Borrow the very least that you can and pledge to pay the loan back in full as soon as possible. Once you repay the loan, begin to raise an emergency fund so that you never find yourself in such dire straits again.
Need cash in a hurry but don’t know which personal loan company you can trust? Supermoney is here to help you find the best options for all you loan needs.
Want to improve your credit score? You first need to know where it stands now. Visit SuperMoney’s credit score search engine and find the most convenient way to check and repair your credit.