Six Places to Find Cash for an Emergency

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Did you know that Americans owed a staggering $13 trillion in debt, as of the close of 2017? This figure is according to a report by the New York Fed, and chances are you have a stake in this debt and for good reason. For example, many people cannot afford to pay cash for a car or even send their kids to college.

This leaves Americans with only one option. Borrow and borrow some more. Even then, you must tread with caution when borrowing unlessyou end up in an ocean of debt. This is why you must know the various options available to see which best suits you.

1.      Friends and Parents

Close friends and family members are the first people you’ll turn to when in need of instant cash. This is because they are the people you know well and vice versa. Besides, if they can lend you the money, they will because they wouldn’t want to see one of their own suffering.

While this sounds like an excellent option, you want to tread with caution. Business and pleasure don’t mix and the same can be said for money, friends, and family. You may have heard of family feuds stemming from money issues or even broken friendships because one party failed to pay up.

To avoid such scenarios, consider drafting an agreement containing the details of the loan. This includes the principal amount loaned, the interest charged, and the agreed repayment schedule. This will not only introduce a business feel, but also protect your relationship.

2.      Credit Unions

Many consumers are moving away from traditional banks and joining credit unions. The main reason for this is that these unions are located within the community they serve. This means they understand their customers ona personal level.

In addition, credit unions offer lower rates, as compared to banks. Also, credit unions have a real human you can sit down with for an in-depth conversation about your financial situation.

The only drawback here is tech-related. Credit unions maynot have the latest technology, which means checking your progress or even making online payments will be difficult. In addition, credit unions don’t have a wide array of products and services. Therefore, confirm with your credit union whether they have what you’re looking for.

3.      Online Money Lenders

Online lenders blew the lending market wide open right after the financial crisis of 2008. Banks tightened lending requirements, leaving many businesses and people without an alternative. Online lenders fused technology with the lending process, and this led to a shortened borrowing process.

In fact, you can receive the loan amount as soon as the next business day. Apart from that, it’s convenient because you can access nation 21 loans services straight from your smartphone. If you have bad credit, you can stillget a loan because several lenders work with borrowers with such scores.

However, you must tread with caution when borrowing money from these lenders. Many of them charge outrageous interest rates. You may end up paying up to 400% in APR or even more. The worst part is this is a vicious cycle that can be difficult to break

4.      Retirement Plans

Do you have a retirement plan? There’s some good news for you because it’s possible to borrow from your retirement plan. However, you can only borrow a maximum of $50,000 or 50% of the vested balance, according to the IRS. Nevertheless, if you’re in need of quick cash, this can an excellent option.

The interest rates offered by this option are cheaper, compared to other forms of borrowing. Also, you’ll be borrowing from yourself and this means paying yourself interest.

Of course, there are drawbacks associated with borrowing from your retirement plan. The major one is missing out on compound growth, something that can delay your retirement ambitions for a while.

5.      National Banks

Traditional banks such as Wells Fargo and US Bank still continue to offer personal loans despite the fierce competition from alternative lenders. Chances are you’re already banking with some of the big names in the industry.

Also, you can borrow money from online banks which cover the entire US, thanks to the internet and they offer attractive loan products. National banks have several advantages, but the biggest one is the wide array of loan products.

They have a loan for everyone, from incentives, fees, and the repayment period. There’s no way you’ll walk in and walk out without finding a suitable product. You can make your payments online and check your progress online, adding that much-needed convenience for customers. If you ever encounter any difficulty or need to talk to an agent, you can do so through their 24/7 customer support.

Unlike credit unions and community banks where you have the privilege of speaking with a real human, with banks you’ll have to deal with a customer care bot. If you’re lucky, you can talk to an inexperienced agent.

However, if you don’t have a good credit score, you’ll end up landing a loan with strict terms or even fail to get a loan altogether.

6.      Peer-to-peer Lenders

Again, technology is responsible for this kind of lending, which is unique, to say the least. Instead of borrowing money from a bank, you borrow money from different individuals. Several platforms, such as Lending Club,lead in this sector. Peer-to-peeris more like a bridge that connects borrowers with people who have a large pool of cash.

Individuals will contribute what they can toward your loan amount until it’s enough. Afterward, you’ll pay the balance plus interest to them. These loans come with competitive rates, and the terms start from three to five years, therefore, making it an excellent option if you’re looking for quick cash and a painless repayment.

The biggest drawback here will apply to people with bad credit because these lenders still take you through an underwriting process. If you have bad credit, you’ll end up with a high interest rate, and if you don’t get enough people to contribute to your loan, you’ll end up with nothing.

Final Word

Finding yourself needing quick access to cash is common in today’s world. It may be a frustrating period, but the good news is that there are several options to choose from that are suitable for you, such as those discussed in this article.

However, if you decide to borrow, you want to shop around for affordable loans, those with low interest rates, low fees, and most of all, flexible. This way, you’ll have an easy time repaying the loan.

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