4 Best ways of borrowing money in case of an emergency – Know your options
It might happen to anyone, a sudden unpredicted yet inevitable expense can leave you cash-strapped or even worse, scrambling hard to allocate funds. Your car’s transmission might have blown off, your child may have fallen seriously ill, you may have lost your job permanently, and any of these might happen to you all of a sudden. Wouldn’t you be worried about how you could fulfill your credit card and mortgage payments? If such a situation arises, where would you turn for help? Would you depend on your friends and family members? Or are there other emergency options as well?
So, if you’re someone who is looking to borrow money during an emergency so that you can bridge the gap between your income and expenses, here are few options that you can take resort to. Check them out.
#1: Family and friends are always your first option
Whenever you’re in dearth of cash and you need them immediately, your first resort will definitely be your family and friends. If you have supportive family members and few bosom friends, this is the undoubtedly the fastest and the cheapest way of borrowing money. However, you should be aware of moving carefully as money matters often damage a relationship. Since a friend doesn’t charge you hefty fees and interest rates, he will offer the money sooner. Try your best to repay the funds as soon as possible.
#2: Credit card cash advance
This is yet another fastest ways of borrowing money and at the same time it is pretty simple too. From your credit card, you are allowed to get a cash advance and the proceeds can be got from the ATM itself. Doesn’t that sound great? However, something that you need to note is that a credit card cash advance is pretty costly. You will require paying something around 2-5% of the amount that you’ve borrowed in the form of fees, that too upfront. Then you will be subject to a rather high interest rate of 25% or more than that.
#3: Seek help of an online lender
There are several peer-to-peer lending websites and other online lenders which can also be a good option for you when you’re in need of money. These options have a quick turnaround and you can soon find cash in your bank account within very few days. However, the interest rates that you have to pay on these might vary depending on the credit rating that you have. On the other hand, if you have good credit, this can again become a rather costly option. Whatever case you might be in, make sure you repay the loan on time.
#4: Home equity line of credit
Did you accumulate some good amount of equity in your home? If answered yes, this could definitely be a good option. This amount will equate the amount you are allowed to borrow. The interest rates on home equity loans are reasonable since they’re secured loans. So, keep in mind that defaulting on your home equity loan may put you at the risk of losing your home. Be timely about the repayments.
Therefore, now that you are pretty aware of the online lending options that you have during an emergency, what are you waiting for? Go through the pros and cons of the above listed options and then choose the one which fits you in the best way.
