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Sometimes you need cash, and fast!

January 5, 2018

 

Sometimes you need cash, and fast, for a broken-down car, a trip to the emergency room or an overdue utility bill.

 

If you have to borrow that money, your options include online personal loans and credit card cash advances, which can put money in your hands immediately. Loans from banks or credit unions could take a few days to a week or more.

 

The trade-off for borrowing fast cash could be a sky-high rate that leaves you in debt.

 

Before you take cash from any lender, take a few minutes to shop around, especially if you have no credit or bad credit. The trade-off for borrowing fast cash could be a sky-high annual percentage rate that leaves you in debt for years.

 

The table below compares the cost of a three-year, $1,000 loan for someone with average credit. How much you pay in interest and fees will depend largely on your credit profile.

 

 

Quick cash, without a loan

Before making a hasty decision to take out a loan, see if you can delay paying for the emergency expense or find interest-free sources of cash:

  • If you’re facing a large medical bill, review the charges and try negotiating instead of taking the bill at face value

  • If you have a job, ask your employer for an advance on your next paycheck; some employers have assistance programs for their employees. You can also consider using an app like Activehours that lets you draw from your own paycheck before payday.

  • Ask family or friends for help, using a contract that details your plan to pay them back

 

CREDIT CARD CASH ADVANCE

A cash advance is an immediate loan from your credit card issuer, and you can get it by using your card at an ATM. Cash advances usually are capped at a fraction of your credit limit; you can view the exact amount in your credit card account.

Things to know:

  • Cash advances come at a high cost; the APR is much higher than what you’d pay for regular purchases. The average at most issuers is 25%, 

  • Most issuers also charge a cash advance fee that can range from 3% to 5% of the amount borrowed, with a minimum of $5.

  • The interest starts to accrue immediately, with no grace period, which means you need to pay off the loan as soon as possible to stop the charges from spinning out of control.

How to get cash if you have a week or more

Try your local credit union. Many offer affordable personal loans, especially if you have bad credit. At federal credit unions, the maximum APR allowed by law is 18%.

 

A credit union may fund your loan in less than a week, once you’re approved.

Federal credit unions also have “payday alternative loans” — with a maximum APR of 28% — and starter credit cards for people who need to borrow a few hundred dollars.

 

Depending on your credit union, you may be able to receive funds in less than a week, once your application has been approved. Many credit unions have online applications, but they typically require a branch visit to complete the paperwork.

 



 

 

 

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