Running out of money is something that can happen to anyone. Even if you took the precaution of saving a few months’ worth of your living expenses in an emergency fund, you never know what kind of emergency you might eventually face.
If you ever ask yourself, “How can I borrow money urgently?” this article is for you. Just remember that each option has its pros and cons, depending on your situation.
Get a cash advance
One of the easiest ways to borrow money urgently is to get a cash advance. Getting a cash advance with your credit card is convenient since you can use your card to withdraw money from an ATM. However, ensure you can pay it back quickly, as you can expect high interest rates.
Alternatively, you could get a cash advance from your bank if you have a chequing account with overdraft protection. Please repay this advance as soon as you can.
Get a loan
Payday loans are a simple and convenient way to borrow money urgently. A payday loan generally allows you to borrow a certain percentage of your next paycheque, and you have to pay it back when you get paid.
Many loans are short term and have high fees. However, if you know you can repay it quickly without needing to borrow money again, such a loan can come to your rescue if you temporarily run out of money.
Ask for a higher limit on your credit card
If you have a good credit score, you could ask for a higher limit on your credit card. If that’s not possible, you could simply apply for another credit card with a higher limit.
You can then use your card to make urgent purchases. And the best thing about credit cards is that if you can pay your full balance before the due date, you will not pay interest. This is like borrowing money for free.
Get a personal loan
You could borrow money urgently from your bank or credit union. A personal loan lets you borrow money quickly, often within a few business days.
You should benefit from low-interest rates, especially if you have a great credit score and high income. You will repay your loan with predictable monthly payments, improving your credit score.
On the other hand, if your credit score is low, you might not even qualify to get a personal loan.
Bring valuable items to a pawn shop
If you can’t wait for a loan to be approved, you could bring some valuable items to a local pawn shop. After repaying your loan, you will receive some money instantly and get your items back.
However, you can expect to pay high-interest rates. If you can’t repay the money you borrowed on time, someone else might be able to purchase the items you pawned. Pawn shops can be convenient, but also be risky.
Get a loan from an alternative lender
An alternative lender is a lender that offers loans to people with a low credit score. Whenever you need to borrow money urgently, you could get an unsecured loan or a loan that uses your car or home as collateral.
You might be able to borrow a lot of money from an alternative lender. Just make sure you can pay back this loan quickly. Otherwise, it might be a very expensive loan.
Get an unsecured line of credit
If you don’t want to use your car or home as collateral for a loan, you could get an unsecured line of credit.
An unsecured line of credit is like a credit card. You have a pre-set credit limit and can use it whenever you need it. When you pay the money back, you should benefit from low interest rates.
An unsecured line of credit is easy to set up; you can use it anytime.
Get a second mortgage
Finally, you could consider a second mortgage. A second mortgage is a secured loan that uses your house as collateral, which means that when it’s time to repay it, you will have to handle two mortgage payments.
Although the interest rates for a second mortgage are higher than for a first mortgage, they are generally lower than many unsecured loans. It could be an option when you need money urgently.
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