Experiencing a financial emergency but don’t have the cash to hand to sort it out? Yes, a payday loan gives you access to fast cash — but for the “opportunity” you’ll be charged an exorbitant amount in interest. So before you head down that route, always consider these four options first to see if you can get cash quickly another way.
Generate Extra Income
The first thing you should do if you desperately need to get your hands on some cash is to try to earn it. If you can do this, you’ll avoid borrowing – and therefore avoid the need to make repayments.
To earn cash quickly when you’re in a pinch, consider selling your old stuff via local Facebook groups. This is often faster than selling on eBay or other websites, as you might just get a local buyer who can collect and pay on the same day. Another option is to see if you can do a bit of overtime at work, or whether you can grab a quick gig on Fiverr or TaskRabbit.
Ask for Help
Before you turn to credit, consider asking for help. Ask your employer if they’ll give you an advance on your paycheck. If you’re worried about paying a bill, contact your provider and explain that you’re struggling at the moment. See if they’ll give you a payment holiday.
If that fails, perhaps there’s a friend or family member that can help instead. Before borrowing money from someone you know though, be sure that you’ll be able to pay them back eventually. And be clear with that person as to when they can expect their money back. Borrowing money from family or friends can put a strain on relationships if things go wrong.
Use an Interest-free Cash Advance App
Consider using a personal finance app that subs you money, interest-free, whenever you need it. The Dave app, for instance, advances you up to $100 from your paycheck interest-free. There’s no credit check required; you just pay back the money you’ve borrowed on payday.
Other cash advance apps include Earnin and MoneyLion. Cash advance apps like these can help you avoid extortionate payday loan fees, but note that subscription fees may apply. Dave is quite cheap though at just $1 per month.
Apply for Credit, Bearing in Mind One Simple Rule
If you are planning to borrow money to get hold of some cash quickly, follow this simple rule – get the best interest rate you can.
So, with that in mind, see if you can get approved for a 0% APR credit card. If successful, you’ll get to borrow money with no interest charged, providing you repay in full before the interest-free period is over.
If that’s not an option, look for the next best thing – a low-interest credit card or personal (unsecured) loan. Shop around for the best deal and be very selective as to which ones you want to apply for.
An application for credit appears as a hard inquiry on your credit report. A single inquiry won’t have much of an impact on your credit score, however, multiple inquiries in a short space of time may have a detrimental effect. It may look to a lender as though you’re experiencing financial difficulty, and therefore, they may reject your application.
If your credit score is already poor, and you’ve exhausted all the avenues above, you could consider a credit card for less than stellar credit scores.
The best credit cards for bad credit are secured, meaning that you’ll need to pay a security deposit, to cover the issuer in case you can’t repay. Of course, if you need cash urgently, you’re probably not going to be able to fork out for a security deposit.
One option you might want to look at is the Indigo Mastercard. It’s for people with less than perfect credit and it’s unsecured. However, the interest rate is 24.9% and an annual fee may apply (from $0 to $99).
Things to Consider if You Urgently Need a Cash Advance
Your first option should always be to try to increase your income rather than borrow money to get yourself out of a pinch. If you can’t do that, ask for help, or fall back on an interest-free cash advance app.
If you have no option but to borrow money, approach credit in the way described above. Aim for a 0% APR credit card first. If that fails, search for the best deal you can find. A credit card for bad credit may be a better option for you than a payday loan – the latter should be a last resort!
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