Running short on money or riding the world's tallest roller coaster -- which one is more terrifying?
If you're in the middle of a financial crisis, you'd probably happily choose to be strapped into a ride at Six Flags. Not having enough money restricts your freedom, threatens your security and limits your choices. It can even mean going to bed hungry for you and your family. Nothing is more frightening than that.
When you need cash quickly, be resourceful. Start with ideas that are the least costly and work your way up the interest ladder from there. When you get over this cash crunch, start putting 10 percent of your paycheck into an interest-bearing savings account so your next rainy day doesn't catch you without a financial umbrella to stand under.
Ask for Help
As Business Insider points out, this is usually the least-costly way of getting your hands on emergency money, although it may not feel the most dignified. Turn to trusted friends and family members. Be selective about who you ask. Get the payment terms in writing and stick to them faithfully, even if you're borrowing from your grandmother. Consider turning to your employer, who may offer interest-free advances on your paycheck.
Cash Out Your Equity
You've probably built up equity in something by now, whether it's your home, your life insurance policy or your retirement accounts. If you own your own home, consider getting a home equity line of credit. How much you can borrow will depend on how much you've paid so far and how much you've got left to pay. Nerdwallet recommends borrowing from your retirement account but cautions you to be careful about adhering to the rules of repaying. For instance, you can borrow from your 401(k) account once a year but you must repay your loan in full within 60 days or the loan becomes taxable. You may also be able to borrow from your life insurance policy, if you have permanent or cash value life insurance. You have the rest of your life to repay the loan. If you don't, the amount you borrowed is deducted from your benefits when you pass away.
Rely on Your Credit (or Not)
Do you have good credit? Then your answer may be as simple as approaching your bank's lending officer for a personal loan. The better your credit score, the lower the interest rate you'll qualify for. You can also consider taking on a credit card, especially one that offers an interest-free introductory period so you have a chance to fix your financial snafu without paying too much for the privilege.
But what if your credit isn't the best? Then it's time to look into alternatives. A payday loan is an advance on your paycheck. You'll typically pay $15 or $20 in interest for every $100 you borrow and you'll have to repay the loan in full with your next check. Don't get in over your head, though, as it's easy to get stuck in a cycle of revolving debt with payday loans. You may also consider a car title loan, which is a credit-check-free loan that accepts the title to a car you own as collateral to secure the loan. You can borrow significantly more money with an auto title loan than with a payday loan but you're putting your car on the line. Make sure you can afford to pay the loan off before you sign your name on the dotted line.
Before You Go
Don't forget you can also turn to community resources for help. Local churches can help with things like utility bills, food, clothes and diapers. The Department of Social Services can also help with bills, rent and food stamps. Don't be ashamed to take advantage of these services. They're here for when people need them. Have a look at this website for a list of local service organizations in your area.
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