Every now and again in life, we are faced with unexpected circumstances. Things can happen suddenly: medical emergencies, sudden bills, utility costs going up, jobs lost, and home repairs needed. When these things happen, we do not always have enough money in the bank to be able to cover these costs, and so we need a little extra help to get us through these hard times.
While it is totally reasonable to think that if you suddenly needed house repairs you could take out a loan for them, or if you unexpectedly needed a new car you could take out an auto loan, it is not always viable. Some of these loans take time to process, and so you're left waiting for the money for longer than you would like. At times like these, you need something speedy so you can get the money pronto and resolve whatever emergency you are faced with sooner.
This is why we love that there are plenty of borrowing options for when you are faced with an emergency. Being able to borrow money when you are in an emergency is great; however, it is even better when you can borrow money and get it fast. This is why you need to know what your options are and how you can borrow money when an emergency strikes.
When you are facing a financial emergency, getting quick access to cash is a number one priority. Depending on what your situation is, you might already have a few options at hand. However, newbies to the borrowing scene, or others for various reasons, may not, so it is important to know where to look.
Always be aware of scammers, and high-interest predatory loans. Even in an emergency, it is not worth taking the risk with these. Here are the types of loans you can take out for an emergency:
Emergency loans come in many forms. They can come as a personal loan, credit card cash advance, or even a payday loan. If you consider any of these options, then it is essential you know how they work.
Personal loans are a favorite for most people. They are a form of credit you can use for pretty much anything, including emergencies. Many lenders will offer next-day or even same-day funding if you are approved. Others might take an extra day or two, which might not always be suitable.
One thing to be aware of with personal loans is that with traditional personal loans, interest rates can range from single digits up to 35% or even higher, as it depends on your credit. While some lenders will typically only work with people who have good credit, there are a few who will work with borrowers who have a fair credit history.
Credit card advances are also an option. If you have a credit card, you may be able to tap some of your available credit as a cash advance.
Credit card cash advance interest rates can vary from card to card, however, some can go as high as 25%!
Payday loans are another option for emergency loans, they are very short term loans with very short term repayments and exceptionally high interest rates. These are not recommended.
If you need an emergency loan but are stuck on which you need CreditNinja helps with emergency money.
Back to credit cards. If you have good or excellent credit, you might actually be able to qualify for a credit card that offers an introductory 0% APR promotion. Depending on the card, of course, you may be able to use it for emergencies and get anywhere from 6 to 20 months to pay it off interest-free.
Do remember that it may take a week or two to receive the card in the mail when you have been approved. If you are in an emergency, this may take too long.
Home Equity Line of Credit (HELOC) is a revolving line of credit which is secured by the equity in your home. If you have one in place, assessing this credit line might be as simple as using a debit card tied to it.
They offer interest rates in the single digits as they are secured by collateral. If you do not already have one though, a HELOC can take weeks to close, so in an emergency is not always ideal.
Finally, it might not always be brilliant, but if loans and revolving credit are not ideal, you can always borrow money from those around you. If you have trusted friends or family members, you might be able to get some help from them in an emergency. Of course, it can be really tough to do this, of course.
You always have to iron out any repayment terms, and potential interest, before you do this to improve your chances of avoiding any conflict with them.
It can be awkward and uncomfortable for both parties, but in some situations, it is better than the alternative.
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