Facing an emergency without a funded emergency fund is scary. Learn how to get emergency money fast.
Facing an emergency is difficult, but it’s even harder when you don’t have money to cover it. How do you get emergency money when you don’t have an emergency fund or your emergency fund doesn’t have enough money in it?
You may see advertisements for payday loans or high-interest loans everywhere, but that should be your last resort. While they are an option, they are financially detrimental and should be avoided if at all possible. Instead, consider the following options.
Peer-to-peer lenders approve and fund loans fast, sometimes in as little as 24- 48 hours. If you have decent credit and can prove your income, you may be a good candidate for such a loan. Despite their reputation, they often have low interest rates and low (if any) funding fees.
Since you shop for peer-to-peer loans online, you can check out several lenders, taking the loan with the best deal. Your credit score will only get hit with one inquiry if you apply with several lenders in a short amount of time. Take advantage and find the best deal and the fastest funding.
Zero Percent APR Credit Cards
Do you have great credit? Consider a 0% APR credit card. Many cards have great introductory rates. You can charge your emergency now, and pay it off before the introductory rate ends. You may get away paying no interest. Even if you can’t pay the full balance off, paying a good chunk of it down limits the interest costs you pay.
Ask Friends or Family for a Loan
If your friends or family members have the liquid funds, let them loan you the money. Just like with a bank, though, make sure you work out the repayment terms. Don’t rely on a verbal agreement – put everything in writing and get it notarized too.
Cash Advance on your Credit Card
If you need the money now and you have a credit card with an available balance, you may be able to take a cash advance. Most cash advance APRs are much higher than standard charges, though, so be careful.
Your interest accrues from the day you withdraw the funds too. You don’t get the traditional 25-day grace period credit cards offer. You may also pay a funding fee (read your credit card agreement), so make sure you can afford it.
Tap into your Home’s Equity
If you're a homeowner with equity in your home (you owe less than it’s worth), you may borrow from it. A Home Equity Line of Credit (HELOC) or home equity loan can take a few weeks to get from application to closing, though, so make sure you have the time to wait.
Home equity loans have closing costs, and the interest rate may be variable. Know the terms of the loan, including the timeline for the closing to determine if it’s a good option.
It’s best if you have an emergency fund ready for times like this, but if you can’t or don’t, these are your next best options to get emergency money. No matter what you choose, make sure you know the interest rates, fees, timeline, and overall cost of the loan before choosing. Don’t let the stress of an emergency force you to make poor financial decisions.