Life is full of unexpected events. You may be financially stable or making ends meet, but unfortunate circumstances may lead you to a large and unexpected cost you’re not able to meet. And putting off or refusing to pay these costs may not be an option.
This is a common problem for many Americans. The average American has $38,000 in personal debt, making it difficult for many everyday people to fund unexpected large costs. In matters where time is of the essence, insurance is out of the question if you don’t already have it whereas bank loans may take long to get approved. When you really need money fast, here are three ways to get that money.
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1. Ask Your Friends and Family
For emergencies, try asking friends and family who can and are willing to help you financially. If you don’t have an emergency fund, asking someone you know for money may be the best solution as it’s fast.
What’s uncomfortable about this option is that asking for money can be awkward. It’s possible that no one in your circle may have the capacity to help you at the moment. You may not feel comfortable asking for money even if you are willing to pay them back in the future. Also, because of your personal relationship, it will be awkward if they refuse to lend you money. There may also be conflict when you pay them back. As much as possible, get your terms in writing: how much you owe them, will there be interest involved, and when can they expect to be paid back.
2. Gap Funding
Once you’ve established your personal priorities, you may find that you can secure a better financial solution if only you had more time. If this is the case, consider gap funding for personal use until you’ve found a better solution.
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Gap funding is used as a temporary loan until person secures a better financial solution. As its name goes, it bridges the gap between the moment you need money now and when you can secure a better loan. These loans are often short-term and used by borrowers also looking for long-term loans.
3. Payday Lenders
When you’re all out of options, try payday lenders. This type of lender offers short-term loans with extremely high-interest credit. Payday loans are legal and regulated whereas loan sharks are illegal and use threats of violence to collect debts.
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These types of loans are your last resort. These provide cash faster than ordinary bank loans, but the interest rates are much higher and can be more difficult to pay off in a short-term arrangement. And when dealing with loan sharks, the threat of violence is real. This isn’t a Disney princess movie where your debts will be forgiven because you need money for a good reason, after all.
When a financial emergency hits, it’s best to stay calm and weigh out all your possible financial options. There may be a solution you might not be considering, and this can help you avoid putting yourself into further debt or being unable to pay when financial hardship hits.