Maybe your car has broken down or you need emergency medical treatment. Whatever the reason, sometimes you just need to borrow money, and you need to do it quickly.
You have a few different options when it comes to borrowing quick cash, depending on what “quick” needs to be, and each has its own advantages and disadvantages. You should be familiar with the ins and outs of each option to make the right financial decision for you when you need to borrow money on the quick.
Need to Borrow Money Now? Here Are Your Four Main Options
You have four major options when you need to borrow money and get it reasonably quickly:
Credit Union and Bank Cash Advances: If you have the time, the APR on a cash advance from your credit union or bank is going to be the lowest of all your options. But the money is probably going to take the longest to hit your bank account — at least a week, and maybe more.
Personal Loans from Online Lenders: Online lenders are stepping in to fill the gaps where traditional lenders are unable to offer services. Your APR will be significantly higher than what you’d get from a credit union, but not as exorbitant as other options you might have. Some online lenders, such as Avant and OneMain Financial, will offer loans to those who have fair or poor credit. This can give you a chance to rebuild your credit while getting the money that you need. The money will hit your account in 1-5 days.
Cash Advance from Your Credit Card: You can walk into a bank and get cash from your credit card. That’s tempting, but the interest begins accruing immediately, and the APR tends to hover around 25% — so this is where money starts getting expensive. What’s more, you might have to pay fees on top of the APR that have nothing to do with interest rates. Still, if you need the money right this second, you might not have a better option than getting a credit card cash advance.
No-Credit-Check Loan: We’ve written about these before and the short answer is that they’re a very bad idea. The APR can be in the hundreds of percent, meaning that a simple car repair goes from costing you $1,000 to $6,000. Avoid these at all costs. They’re basically in the same league as payday loans and car title loans. You’re better off getting the money from just about any other legal source. Indeed, a pawn shop might even be a better option than this.
Of course, you could also hit up friends or family members if you need to borrow money, but we discourage that for a number of reasons — it’s simply not worth risking a close relationship.
A Better Alternative to Borrowing Money
Depending on how quickly you need the cash, you might even be able to compare offers from various lenders to ensure you get the lowest interest rates. However, if you really need the cash right away, your options are going to be limited.
The best way to avoid getting into this situation in the first place is to have an emergency savings fund in place. Six months of living expenses is the gold standard, but having even $1,000 on hand for life’s curveballs can keep you from needing cash so fast that you have to pay through the nose to get it.
Once you’re back on your feet, even putting 5% of your income away each week can help you build up an emergency fund pretty quickly.