A financial emergency is uncertain. No matter how we prepare for it, we are often left baffled when faced with it. In such situations, it is important to think smartly and not fall into a debt trap with high-interest rates and predatory loan schemes. Here are nine ways that you can keep in mind to get money if you need money urgently
Need Money Urgently? How to Fund Your Instant Cash Emergencies
Are you in need money urgently, Checkout 9 ways to get instant Funds:
- Personal Loan
- P2P Lending Platform
- Withdraw Cash from Your Credit Card
- Credit Unions
- Local Council
- Budgeting Loan
- Hardship Payment
- Payday Loan
- Friends or Family
Personal loans are unsecured loans that you can get quickly when you have a financial emergency. There are personal loans for every financial need – from travelling to weddings and home renovation to car loans or any other sudden funding need you might face. Moreover, the best part about these flexible loans is that most online personal loan lenders offer one-day or even same-day funding post approval! So, you can skip the long loan approval process that sometimes used to take months.
The personal loan tenure and interest rate will change depending on your credit score. Some lenders charge single digits to up to 35% of interest rate on personal loans. While other lenders don’t risk working with people with a bad credit score. If you fall in the low credit score category, you can choose short-term personal loans. However, the risk is that they could have high-interest rates, and some lenders even charge heavy three-digit APRs. So, ultimately, it will cost you more. Instead, always look for low-interest personal loans that are easier to pay off later.
You can compare personal loans from several lenders in one spot with LoanTube to find your best fit!
A P2P (peer-to-peer) lending platform is where individuals can directly get loans from other individuals, cutting out the financial institutions as their middleman. Also known as crowd lending or social lending, they have increasingly become a great alternative for financing emergencies. These online platforms connect lenders with borrowers to provide them with unsecured loans. Interest rates and terms are set by each platform individually. Most of these websites provide a wide range of interest rates for individuals with the best credit scores.
This is a good platform that is worth exploring if you are in urgent need of money. It is an excellent option for people with high credit scores as your chances for loan approval increase.
Today, almost everyone has a credit card. This financial tool is extremely beneficial and the most flexible credit product. It lets you make offline and online merchant payments and EMI-based payments. Apart from that, you can even withdraw cash, like a debit card. However, this withdrawal system is a bit different from a debit card.
Technically, credit card withdrawal is called credit card advance. With this feature, you can withdraw cash from an ATM using your credit card. But since the main function of a credit card is to make transactions and not withdrawals, you can withdraw only up to a permissible limit. Your bank sets this limit, but not all banks offer this facility. So, confirm with yours. Moreover, you also have to pay additional charges with interest on the withdrawn amount.
Credit unions are non-profit financial institutions that work like a traditional banking service. However, they only work to serve their members. Like traditional banks, credit unions provide loans and financial services, and allow you to make deposits. However, only credit union members have access to these financial services. They aim to provide their members with better rates and fees than traditional banks.
The interest rate and account fees charged by the members are reinvested into the products they offer. Whereas in traditional for-profit banks, the rate and fees charged are given to the shareholders.
They have lower interest rates than other traditional banks. You must first be a member to get financial help from credit unions. Some unions will have the requirement to build a considerable amount of savings to join. This is a great option if you are looking for institutions that lend at low-interest rates and even encourage savings on the way.
Local councils have welfare assistance schemes, usually for people with low income and those who face financial difficulties. Every locality runs its own scheme with different rules. Some local councils offer small loans, grants, food vouchers and free used furniture.
You can apply for a budgeting loan if you have been on a benefit like a job seeker’s allowance, employment and support allowance, or income support for more than six months. These loans help you pay for travelling costs within the UK, rent in advance, clothes or footwear, moving houses, furniture or household items, maintenance, funeral costs, maternity costs, repaying hire purchase loans, and repaying loans for the above-listed items.
When you take a budgeting loan, you only repay the borrowed amount. This means that the repayment is interest-free. Depending on the borrowed amount, you have to pay the loan back within two years, and the repayments are usually taken out automatically from your benefits.
If you or your family are not financially able to pay essential bills, you can apply for a hardship payment. This loan is given to you when your Universal Credit has been cut off due to a penalty of fraud or a sanction in order to aid your emergencies like covering household expenses of food and bills. Once your sanction ends, you have to pay back the hardship payment. You can take the help of this loan till your next Universal Credit payday, and if you are still facing a financial crisis, you have to apply for another hardship payment again next month.
A payday loan is a form of an emergency loan. This short-term borrowing product is meant to fund small amounts, but you will be charged high-interest rates based on your income. They are unsecured loans; hence, you won’t need collateral.
Payday loans can also be considered predatory lending as they have high-interest rates. The lenders do not consider the borrower’s repayment ability and have borrower’s fees. The APR is around 400% and has a short repayment window, making it extremely hard to pay off. It can be a debt trap for many. So, keep this option only when other instant cash options don’t fit your needs.
If the thought of applying for a loan scares you because of the fear of being unable to repay it, you can always turn to your trusted friends and family members. Asking for money from your loved ones can be tough, and some might even feel awkward. But if this option is what you have to choose to avoid falling into debt, then go ahead. But before that, ensure you set clear instructions on the interest rates and repayment terms to avoid conflicts.
Preparing for Your Next Emergency
Once you survive the financial emergency you are in, start building ways to prepare yourself to tackle the next one when it occurs.
Set a budget to avoid overspending every month. Create a plan for your current situation. Begin by listing down whatever EMIs you have to repay at the moment and plan accordingly. Lastly, ensure you maintain a good credit score. We cannot stress enough how important it is to improve your credit score as it shows your creditworthiness! So, the next time you are hit with a monetary emergency, you can rely on your good credit score to get a loan with a lower interest rate and better benefits.