Finding yourself short on cash is never fun, but it happens more often than you probably realize. Life happens and when it does, having a backup plan allows you access to fast loans that provide you with the quick cash you need when you need it most. With that in mind, here are five ways to obtain fast cash loans.
Use a credit card — or get a cash advance on it
What began in the 1920s as a cash alternative for specific financial obligations has exploded to include mass-market, global credit access. The Bureau of Consumer Financial Protection reported in August 2019 that about 170 million Americans rely on credit cards in their financial lives. Although it’s not the best idea to rely on credit cards for small, everyday purchases, it does offer a viable option for life’s unexpected events, urgent concerns, or emergency needs that would otherwise go unmet.
If you need fast cash, many cards today also offer cash advance with ATM withdrawal limitations. However, be aware that this often includes a high APR. There are some cards with a lower APR, but you’ll need to do your homework and shop around. Bear in mind that anytime you borrow money with interest, you’ll need to budget wisely and pay off balances quickly.
Apply for a personal loan from an online lender
If credit cards aren’t your thing, then same-day loans from your bank is another option. A word of caution, however: avoid the use of payday loans because the interest is often unsustainable for your budget. In a 2017 article, InCharge Debt Solutions reported that “The average interest rate on the average payday loan is 391%.” Not surprisingly, these loans are often re-borrowed within a month. In fact, the Consumer Financial Protection Bureau reports that the incidence of re-borrowing payday loans happens with four out of five of such loans.
In a pinch, it’s far better to seek out a financial institution for same-day loans but always check your credit first to ensure that you meet minimum credit requirements for the institution. Some of the best personal loans can help you borrow $1,000 to $100,000, depending on your needs, your credit and other qualifiers. The best rates for personal loans with lending institutions vary according to the market as well as your personal financial factors. So shop around before you borrow.
Check Your Personal Loan Rates
Answer a few questions to see which personal loans you pre-qualify for. The process is quick and easy, and it will not impact your credit score.
Ask your bank or credit union for a cash advance
A cash advance is a type of express personal loan that many banks offer. As with other loans, rates vary with some as low as 5.99%, but they can be 20.89% or more, depending on the lender and other factors. A quick cash advance with an express loan can help you fund little emergencies, engagements, a remodeling project and much more. Decisions for an express loan are usually fast, taking anywhere from minutes to a couple of days and giving you access to funds when you need them.
Experian, one of the top three credit reporting agencies, released a study in 2019 highlighting that there are currently 38.4 million personal loans — an 11% increase over the previous year. However, most of those are for mortgages and only 2% are for personal use. This is important because personal lending is a valuable tool that is often underused. It’s not a replacement for adequate budgeting, but it can certainly help in those rare situations that pop up when you least expect.
Why payday loans and no-credit-check loans should be a last resort
As mentioned earlier, payday loans are not recommended and the same applies to no-credit-check loans. The interest that comes with payday loans is unsustainable and well beyond other lending options — especially if you’re already living paycheck-to-paycheck. Another problem is that you’re more likely to get sucked into an endless borrowing cycle. This is particularly true with payday loans.
Sometimes life happens. Your car breaks down, you get a flat tire or someone gets sick. Having savings in place will provide a safety net to carry you through, but not everyone has savings in place.
A new study by Bankrate reveals that 23% of Americans have no savings at all while less than a third have the necessary six months or more in their savings accounts. A payday loan can help you when there’s a crisis, but they are not a long-term solution and should only be used as a last resort. If you shop around, you may find better rates for no-credit-check personal loans from top lending institutions, but again, it’s always best to use these only as a last resort.
How to avoid cash emergencies in the future
Avoiding future cash emergencies requires planning and saving. When money is tight, budgeting for savings is hard but not impossible. It involves a certain amount of sacrifice to build your savings. If you’re currently behind on regular monthly bills, it’s best to catch up on these first before beginning with any savings plan. Also, if possible, pick a number and try to save that portion of your paychecks towards an emergency fund; 20% is recommended, but 15% might be more realistic if you’re struggling with paying off debts.
While you’re taking steps to save money for emergencies, you can maximize your efforts by choosing a financial institution that offers one of the best rates for high-yield savings accounts. Shop around because some institutions require a minimum deposit to get started, but that’s not true for all of them.
The bottom line
The bottom line is all about prevention. Yes, life happens and sometimes you need fast cash loans to get out of a sticky situation. Yet, the key is not about preventing things beyond control, but to prepare for events and life’s little (and not-so-little) emergencies before they happen. If you must borrow, then do so by shopping around to get the best rate and seek out payday loans alternatives whenever possible. Start a savings fund, even if that means only saving $5 or $10 at a time. Find a high-yield savings account that packs a powerful punch with APY and begin to invest in yourself and your future.
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