Don’t have enough money to cover an unexpected expense? You’re not alone: 40% of Americans don’t have at least $400 in savings to cover an emergency.
Fortunately, there are legitimate ways to get your hands on some quick cash to pay for a credit card bill, medical service, or other surprise expenses. Here’s where to borrow money.
1. Your Bank
If your bank is on the smaller side and your credit is good, you may qualify for a personal loan. Some banks give existing customers an interest-rate discount, so ask about this perk when applying. Some banks may also waive the loan origination fee, making this option for borrowing money even more attractive.
2. An Online Lender
Personal loans from online lenders are your best bet if your credit rating is low. Getting approved for a personal loan is a chance to rebuild your credit if you can pay it back on time.
You’ll need to pay interest, which can be quite high, on top of the borrowed amount. Be sure to review the terms of the loan in detail so you understand what’s expected as you pay it back.
2. A Credit Union
Personal loans from credit unions often have lower interest rates and fees than banks. One downside of this option, however, is that you must usually meet certain eligibility requirements to join the credit union. You may also have to wait up to five business days for the money to become available in your account.
4. A Payday Lender
For people with no credit history, a payday lender may be the way to go if you only need to borrow about $500 or so. But because they don’t require a credit history, payday lenders typically charge high interest and fees and the borrowed amount is due by your next paycheck. Find out more about the pros and cons of payday loans.
5. From Someone, You Know
This one can put a relationship at risk, but if a family member or friend is willing to lend you money, it may prove to be a better deal than risking high-interest rates from traditional avenues. Before agreeing to this, make a promise in writing that you’ll pay the full amount back to the person by a specified date. They also may or may not expect interest paid along with the borrowed amount.
And here’s the most important part: pay the lender back on time. If you don’t think you can commit to the due date, don’t take the cash. A strained or broken relationship isn’t worth the price.
Now You Know Where to Borrow Money
Now you know where to borrow money in a pinch, but another option you should consider is avoiding it in the first place. Work on saving an emergency fund for the next rainy day and you won’t have to worry about filling out paperwork and wondering if your credit qualifies you for a loan.
Check out our latest financial independence posts so you’ll never be short on emergency cash ever again.