We all know that these are tough economic times, and a recent news report that an astonishing 57 million Americans do not have a single dollar in emergency savings proves just how hard times can be in the 21st century. If you fall into that category, or even if you have a little put by but might need something more, what are the options available to you if you need a sudden cash injection? Let’s take a look.
Family and friends
Nobody likes to have to ask family and friends for help, but from a purely dispassionate perspective, it usually makes the most financial sense. There are no credit checks, and you are likely to be able to agree either an interest-free deal or at least a very low rate. Of course, all that is easily said, but many of us would sooner leap off a tall building than asking for that sort of help, and mixing finance with friendships can be highly perilous and lead to disputes and heartache.
A personal loan
In the real world, it is almost always a better idea to go online and take out a bespoke loan for whatever you need. The benefit of such services is that you can craft the loan to meet your individual needs, and can even adjust it according to your own credit rating. This means everyone gets a fair deal, and it is all objective and unemotional.
Credit cards
There are numerous credit card companies out there, all competing for your business. The positives are that there is flexibility in how much you borrow and there are some great rates available right now. The flip side is that you can all too quickly find yourself becoming reliant on the credit card and living beyond your means. Also, those great looking interest rates are usually only offered for a few short months, after which they can skyrocket.
Home equity loan
If you are a homeowner, you can leverage the equity in your home to raise capital fast. This can be a good route if you need a large sum of money but bear in mind that you will be repaying the debt for many, many years to come. However, according to Moneybanker, you risk losing your home if you cannot keep up the repayments.
Which is best?
Of course, it depends on many factors – how much you need, your credit score, whether you own a home and how wealthy and generous your family and friends might be. While there are pros and cons to all the options, the one that really ticks all the boxes, however, is the loan option, particularly given the low interest rates we are currently enjoying.
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