Sometimes you will find that you are suddenly in need of emergency cash. Perhaps your car has broken down and you need to pay for it to be towed and fixed. Maybe you’ve had a trip to the emergency room and now have a large medical bill to pay. It might be that this month you are stretched a bit too thin and can’t make it to the next payday. Whatever the reason, when you need cash fast, you need to know what you are doing.
Though unexpected large bills are likely to make you feel panicked, try to slow down and think it through. If you can negotiate the cost, there is no harm in trying to reduce the bill. If you can’t, don’t just jump on the first loan you see, shop around for the best deal with the lowest interest rate.
Taking out a loan without much consideration could leave you with years paying off a debt you didn’t think through. Take your time.
Get a Credit Card
If you need to make a large payment, a credit card is a good way to make it. However, as you will be charged interest on your credit card debt, you must make sure that you can meet minimum payments and do your very best to pay it off as quickly as possible. Shop around before you settle for a credit card to make sure that you get the best deal with the lowest credit. If you have a low credit rating, you might find this process difficult and be forced to choose a card with a higher interest rate as you are regarded more of a risk.
Medical bills should never be paid using a credit card. Though you might think that it is the most logical solution, medical bills can be negotiated and you can pay them off over a series of months with little to no interest charged. If you miss a payment on a credit card, you could do yourself some serious financial damage so negotiate other methods first.
Borrow Against Your Assets
Your assets could be a good way of borrowing as they won’t usually require a good credit rating. A pawnshop loan can be taken out against lots of items in your house, but be aware that if you fail to make your repayment, the shop won’t come after the loan money, they will simply sell your deposited item.
Another item you can borrow against is your car. You can get approval for a car title loan online and you don’t need to have any credit rating to do so. Again, be wary of high interest rates and the possibility that you could lose your car if you fail to make payments. You should see these types of loan as a last resort, or only take it out if you are confident that you will be able to repay.
The final asset you can consider borrowing against is your house. Refinancing is a good way to achieve a better deal or to shorten the length of time it will take to repay your mortgage. However it can also be used to consolidate your debts into a relatively low interest mortgage. As with all loans, you should not treat this loan as a solution to all your problems if you are regularly finding yourself in debt. Though refinancing can be a good solution, you need to work hard at bringing your finances in line to avoid spending the rest of your life trying to pay off your mortgage.
Ask Your Employer for an Advance
If you are really stuck and you would prefer not to take out a high interest loan or risk your possessions, there is one more thing you can try. Ask your employer for an advance on your paycheck. This won’t always work, because in many ways, this will just delay the problem by a month. However, it will buy you time to consider how you are going to plug that financial hole.
Family and friends could also be an option, but you must be wary here. Nothing breaks relationships like the lending of money and you might find that your friendship is strained by the loan, especially if your friends and family can’t really afford to help you.
Though borrowing money is sometimes unavoidable, you should always endeavour to build up an emergency fund for yourself while you can. Insurance is always a good idea too, and should help you if you get into a sticky situation. Furthermore, if you are able to claim compensation for things like injury or damage, you should pursue these claims as a matter of urgency.