You need money now, but your paycheck at work only comes in several days or even weeks. Answering “what to do” can be even more difficult when you are in an emergency. However, there are several ways that may help you get your hands on cash in a hurry. None of them is exactly ideal and risk-free, but they could end up the only solution in a financial crisis.
Urgent Loans
According to the economic report on the well-being of U.S. households in 2021/22, 32% percent of adults confirmed that they would have paid unexpected expenses by borrowing an emergency loan or selling something.
Thus, if you do need money now or find yourself facing an urge to pay for unexpected expenses, such as a car repair, home-appliance replacement, or a medical bill, the first thing that comes to mind is a short-term allowance. There are many types of urgent loans depending on factors, such as the amount you want to borrow, the set of interest charges, fees, and repayment terms, among others. It will be helpful to compare several loans in one place to find the best option.
Several lending providers allow access to short-term credits to individuals with either good or bad credit scores. These mainly are:
- Online financial institutions: the most convenient way if you need money now. The application procedure is easy and doesn’t take more than 5 minutes of your time. Normally, online payday lenders review your income to determine your eligibility for the money.
- Credit unions or cooperatives: many companies offer this type of loan, but you need to be a member to access their service.
- Banks: they offer more traditional financing products like personal loans and lines of credit. The process will normally require more documentation for these cases, and surely a guarantee.
Pros
High financing time: the speed of transactions is usually high and can be processed on the same day of approval, which is convenient for those who need money now.
Not strict requirements: the possibility of approval is also usually higher in this type of credit. Plus, there is no need to gather large amounts of paperwork to apply for emergency loans.
No credit check: it is possible to apply for urgent loans even when your FICO score is 500 or lower. It is a great advantage for those who experience financial setbacks, with a negative credit rating.
Cons
High interest rates: these loans are expensive and can reach three-digit APRs. Also, short-term allowances are usually capped at a few hundred dollars.
Short repayment terms: the amount you have borrowed from your lending provider must be returned on your next payday, typically ranging from two weeks to one month, depending on the loan type.
Risk of scammers: some unregistered companies may be not transparent about their services and charge borrowers money on hidden fees. Fake websites often run lucrative ads to attract customers and trick them into misusing their data. Don’t fall for it.
Employee Loans
Another option you might think of while being in a tight spot is getting a payday advance on your next paycheck. Some organizations offer such allowances through a third party as a fragment of their benefits packages.
Employee loans can be a low-cost option to borrow, and they might help you out when you need money now. That said, they usually charge fees, and can lead to unfeasible financial habits if paid for early access to your own money. Here’s what to expect from paycheck advances.
Pros
Low-cost accessibility: employee loans usually come with single- or double-digit interest rates. They are much more affordable than payday loans, which can be charged at 300-700% APRs.
Credit building: they will help you report credit for the next time you want to borrow. It’s not the perfect way to build credit only, but it is a great perquisite that other short-term alternatives may not offer.
Cons
Paying fees to borrow your own money https://www.justrightloans.com/: when you need money now, employer-provided paycheck advances require you to pay interest to borrow. In that sense, you will be able to repay via payroll deduction.
Not the best benefit package: if your company offers this program as a perk, consider whether it is a better option than a higher salary. In most cases, it is a good idea to start searching for a job that pays more, instead of using these loans.
Preparing For Next Time
This is not something you want to hear if you need money now, but anyway, consider bulging an emergency fund in advance that can keep you afloat in an emergency. Allocating some of your paycheck to savings can mean the difference between overcoming a short-term financial adversity in life or going into debt. A goal of $500 for savings is a good spot to start.
