We all need emergency funds. But what if your savings are not enough? If you're an unemployed or live paycheck to paycheck, it's easy to run dry of cash. Luckily, you can get a quick fast loan no matter your financial situation.
Whether you have a bad credit score or have a short employment history, you don’t need to sell your assets to get emergency cash. Below, we explore all the options you should consider for a fast loan.
Personal Loan from Loved Ones
Asking for a loan from a friend can uncomfortable but it’s one of the first options you should always consider. Your friends will rarely demand interest rates when they lend you money. If you’re close, they may allow you to pay back the money when you’re most comfortable.
If you have close friends and family members who can lend you money, always consider borrowing them. Some loved ones may ask for an interest rate on the loan—don’t get angry. Agree on a fair interest or bargain your way out of the interest.
7 out of 10 people in the US own credit cards. You probably own one or know someone who uses a credit card for shopping. They’re easy to acquire and you don’t need to give up an asset as collateral. It becomes even better if you qualify for a fast loan that asks for no interest rate.
You can shop and buy items with the credit card at will. Depending on the contract you sign with the credit card company, you will pay back the money between one and three years. The money is paid in installments that include interest rates.
The best credit card companies will offer fast loans of up to $10,000. If you are a high-income individual with an excellent credit card score, you may qualify for more.
Unsecured No Collateral Loan
Often called personal loans, unsecured no collateral loans are increasingly becoming popular online. If you can’t get a loan from a friend, these loans are the best option. The main requirement is to be a legal citizen and be at least 18 years old. They may ask for your credit score, but it does not play a big factor in whether you get the loan or not.
Personal loans have a payment limit of five years. Their interest rates may be higher than on average, but not always. Some companies offer 10% interest rates to people with the best payment histories.
Unlike bank loans, you can apply for unsecured no collateral loans online with ease. The providers are licensed to operate in your city or country. They ask for few personal financial details and process the cash within a few days.
Personal loans are great when you need an emergency loan faster than all your other options. When you need to pay for medical bills or exam fees, unsecured loans can be processed almost immediately.
Your 401 (k) Plan
You can borrow up to 50% of your 401(k) fund as per federal laws. The amount shouldn’t exceed $50,000 though and should be paid back within five years. On the bright side, a loan from your own savings is better than visiting a pawn shop to sell essential assets.
This kind of loan is a great option when you need to borrow a large amount of money. For amounts lower than $10,000, all other options are considerably better. Failing to pay installments for your 401(k) borrowed attracts high penalties. You also miss out on capital gains and other dividends if present.
For people who’ve already financed their mortgages, home equity is one of the best ways to get a huge, fast loan. Usually repaid between five and fifteen years, home equity loans are large and with low-interest rates. The average APR for home equity is 5%. In the US, these kinds of loans are allowed only to improve the house and not for emergencies.
Imagine your bank giving you monthly payments with your home as collateral. No, this is not home equity. It’s a special loan accorded to people aged above 62 years in some countries like the US. You get the money with no interest rates. When you die, your home is auctioned off to finance the loan.
Reverse mortgages come with rules though. You must pay real estate taxes and take care of basic house maintenance. If you don’t, your house could be sold off. It’s a great loan for retirees without a lot of income options.
Although called a fast loan, a reverse mortgage may take up to a month to set up. It’s handy if you qualify for one and have recurring medical issues. You don’t have to pay back the loan while you’re alive, which is a great thing.
Active Hours Loans
For people paid by the hour, they’re fast loans curtailed to suit you. An alternative to active hours is Daily Pay loans for persons paid on a day to day basis. Financiers allow you to borrow an average of $100 a day for the active hour loans. Daily Pay loans lend money to workers whose working hours are tracked.
There are many fast loan providers for people in hourly paid jobs. The loans have relatively high-interest rates of up to 30%. But the loans are easy to access and better alternatives to collateral-based loans.
It may seem extreme and unnecessary, but it’s still an option when you don’t have an alternative. Pawnshop loans allow you to borrow up to $5000 by leaving valuable items as collateral.
It’s easy to qualify for these loans since all they need is the collateral item and a receipt. If you don’t pay back the loan, you lose your collateral. You may lose your beloved item, but you don’t have to deal with debt collectors afterward. You don’t have to lose a more important item like a title deed or get locked out of your car.
Gone are the days when you had to sell important household items to get a fast loan. With your government ID and a few financial documents, it’s easy to get a loan of up to $1500 on the same day. Some loan options are easier to qualify for than others.
Evaluate all your options and choose a method that best fits you.