An emergency in life can strike at any time; a car accident, job loss, a fire at your home or a medical crisis are just a few examples of emergencies that might leave you hurting for emergency cash.
Fortunately, there are numerous ways to find funds when disaster strikes and you’ve used up all your reserves (or don’t have savings to draw from). While the best option is always to have an emergency nest egg, there are still ways to get access to money in a pinch.
Second Mortgage or Home Equity Line of Credit
If you own a home and have some equity in it, it can be used as collateral for a loan or line of credit. This is one of the lowest-interest options; however, this type of loan is a complex financial product and may take some time for approval. You should be certain of the terms before signing on.
Personal Bank Loans
If you have a pretty good credit score, you should be able to qualify for a personal loan with a decent interest rate. Persons with less than perfect credit may still qualify; however, the terms and interest rate will likely not be as desirable.
If you have money socked away in an IRA or 401K retirement account, you may be able to borrow against it. Terms and conditions will apply, but interest rates tend to be reasonable and won’t adversely affect your credit score. You will likely have a deadline to pay the loan back, and if you lose your job, you’ll have to pay it back entirely or face penalties for early withdrawal.
Credit Card Cash Advance
Credit card cash advances can be procured quite quickly either via convenience checks or a bank withdrawal via an ATM machine. However, there are usually transaction fees involved as well as hefty interest rates.
Peer to Peer Loans
Peer to Peer (or P2P) lending involves receiving a personal loan from someone who is interested in lending money as a way to invest their assets. Like most loans, your interest rate will be based upon your credit worthiness, so terms can vary accordingly.
Emergencies in life sometimes call for emergency money, and it can feel scary when you have no savings to draw from. If you’re ever faced with a financial emergency, consider one of these five options to get you through it.
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