Even with careful planning most people will face a financial emergency at least once. There are several options available if you are experiencing a cash crunch and need to borrow money fast. Explore each option carefully (and even brainstorm a few more) to arrive at a money solution that makes sound financial sense.
Instructions
1. Start with close friends and family.We've all heard that borrowing from friends and family is less than ideal, but under the right circumstances it can be the perfect solution. Here's what to keep in mind before you ask loved ones to cough up any cash:Know how much money you will need and borrow only that amount.Be ready to outline a repayment plan before you ask to borrow. Make your repayment agreement in writing - each person involved should have a copy.Commit to keeping your repayment agreement - This is where the plan often goes sour. Honor this financial obligation just as you would with a bank or other creditor. If you don't, chances are the friend or family member you borrowed from will feel frustrated, hurt or angry and your relationship will suffer. If you must miss a payment, share that information as soon as possible. Discuss when you will be able to resume payments.
2. Consider a payday loan.In-person payday loans provide immediate access to cash, perfect when you need money fast. You can also get a payday loan over the Internet. The lender deposits the money into your bank account, usually within 24 hours. Here is what you should know before you get a payday loan.Compare payday lenders to choose the most reputable and affordable.Consult your budget to be sure you can repay the loan, and manage your regular expenses, on your next payday - if you can't, you may find that with rollover fees your debt doubles.Read the contract carefully. Give particular attention to the total cost of the loan, including all fees.
3. Sell your stuff.Storage centers are booming for a reason, most of us have far more than we need and no place to keep it all. Solve your cash crisis by scaling back. Here's how:Participate in your local community center bazaar.Have a yard sale - you might even organize neighbors for a giant sale.Take the things you want to sell to a consignment shop.Unload your goods on eBay. Advertise in your local classifieds.Trade your treasures at the local pawn shop.
4. Tap your retirement savings.Depending on the nature of your emergency, you may be able to get cash from your 401(k) in just a few days. This option should be used only as a last resort, such as situations where you are facing foreclosure or have a medical emergency. Keep in mind that there are significant tax penalties for early withdrawals. Also, even if you take the money as a loan and repay it, you will not be able to make up for the money you could have earned (compounded interest) on the money you borrowed.
5. Try a finance company.Companies such as Beneficial and CitiFinancial make personal loans pretty quickly. Interest rates on personal loans, because they are unsecured by collateral, are generally higher than secured loans. Borrow only as much as you need, and plan to repay the loan as soon as you can. Avoid missed or late payments, as these may trigger even higher interest rates and additional fees.
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