We’ve all faced financial surprises: a broken car, trip to the emergency room or forgotten utility bill. Sometimes you need cash, and fast.
Credit card cash advances and some personal loans can put money in your hands immediately; a loan from your bank or credit union could take a few days to a week or more.
But before you take cash from the first lender that will approve you, take a few minutes to shop around, especially if you have no credit or bad credit. The trade-off for getting fast cash can be a sky-high annual percentage rate.
Below is a quick look at options for 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. Read on for a detailed comparison of your options.
|Type of lender||APR||Total repayments||Time frame|
|Federal credit union||9.25%*||$1,149||A week or more|
|Online personal loan||15%||$1,248||1 to 5 days|
|Credit card cash advance||25%||$1,431||Immediate|
*Average 36-month unsecured loan rate as of December 2015, National Credit Union Administration.
**Payday installment lenders don’t consider credit; 200% APR would be on the low end.
Buy some time
Before making a hasty decision to take out a loan, see if you can delay paying for the emergency expense.
For example, if you know you’re going to miss a payment for an unexpected cost such as a medical bill, consider calling a billing representative and saying you need more time. They might be willing to waive fees or work out a more flexible repayment plan.
If it is an option for you, ask family or friends for a loan. But make sure you agree on a plan to pay them back. If you have a job, you can also try asking your employer for an advance on your next paycheck. Some employers have loan assistance programs for their employees.
How to get cash in a day
CREDIT CARD CASH ADVANCE
A cash advance is an immediate loan from your issuer, and you can get it by using your existing credit card at an ATM. But beware that cash advances come at a very high cost.
The APR for a cash advance is much higher than what you’d pay for purchases. The minimum cash advance APR at most banks is more than 20%. In addition, most banks charge a cash advance fee that can range from 2% to 5% of the amount borrowed. So if you borrow $1,000 at 25% APR with a 3% fee, you will have to pay back $1,431, plus a $30 fee.
The interest also starts to accrue immediately, with no grace period, which means that you need to pay off the loan as soon as possible to stop the charges from spinning out of control.
Cash advances are usually capped at a few hundred dollars, so you likely can’t withdraw your entire credit limit.
PAYDAY LOANS, NO-CREDIT-CHECK INSTALLMENT LOANS
You may have seen payday lenders that advertise “fast cash loans,” “instant cash loans” or “quick cash loans.” They typically offer loans without checking your credit, but you often need a bank account and a regular paycheck to qualify.
Beware these lenders: They may promise you instant cash, but those loans come with rates upward of 1,000%. For example, a $1,000 loan from a payday lender that charges 400% APR means you’ll have to pay back $1,153 in two weeks.
If you couldn’t come up with the cash for your emergency expense, it’s highly unlikely you’ll be able to pay it all back with interest in two weeks’ time. That’s how payday loans trap people in a cycle of debt.
“Lenders who offer fast cash often are not taking the care to make sure people can afford the loans,” says Lauren Saunders, associate director at the National Consumer Law Center, a nonprofit advocacy organization.
Just as bad are no-credit-check installment loans, which have interest rates similar to payday loans but are spread out over a longer period.
A slightly better choice may be a pawnshop loan. These have APRs lower than payday loans because you leave an item you own as collateral. If you don’t repay, you don’t get sent to collections — but the shop sells your item.
Before using any high-APR lender, try nonprofits, religious organizations and other alternatives in your community.
ONLINE PERSONAL LOANS
Some online lenders offer loans in as little as an hour or within one business day. Rates are based on your credit history and typically capped at 36%. Some also look at other factors such as your profession or college major. Some lenders cater specifically to those with bad credit or those with good credit.
To avoid delays, gather the data you need to apply for a personal loan so that the company can easily verify your identity and other information.
Lenders that say they typically make loans in a day include:
How to get cash in less than a week
If you have more time, you have many more choices. The majority of online lenders offer loans within one to three business days, although the exact amount of time depends on your individual application.
Marketplace lenders like Lending Club, Prosper and Peerform connect borrowers with the investors who lend money. Loans are typically funded very quickly, but sometimes it may take longer than a week to get your money.
You can compare online lenders to see which one suits your credit profile and needs. The interest rate you receive will depend on your credit. Some lenders also charge origination and late fees.
Lenders will usually run a soft credit check, which won’t affect your credit score, to determine if you qualify for a loan and what rate you’d pay. It’s worth taking 20 minutes to apply at a few lenders and choose the one that gives you low rates and fees plus payment flexibility.
Each lender uses a unique method to assess applicants, which means the rates you’re offered could vary from one lender to another.
How to get cash if you have a week or more
Credit unions offer personal loans, also known as signature or unsecured loans. They’re also a good source for small-dollar loans and starter credit cards for those who need to borrow a few hundred dollars.
Depending on the credit union, you may be able to receive funds in as little as a week, once your application has been approved.
You don’t always have to be a member of a credit union to apply for a loan, and many credit unions have online applications. These community institutions work with borrowers to make sure their loans are affordable, even for those with poor credit. At federal credit unions, the maximum APR allowed by law is 18%.
Not all large national banks offer personal loans, and those that do usually require the borrower to have good credit. It can also take longer to go through the application process and be approved at a bank than it would at an online lender.
Most non-payday lenders report loan repayments to a credit bureau, so missing a payment can knock double digits off a credit score. But on-time payments could improve your credit score — and a good credit scoregreatly improves your options in future emergencies.
When you’re looking for quick ways to get cash, it’s important to reflect on how you can avoid landing in the same situation again.
“Unexpected expenses are often not unexpected; they’re often just unplanned,” says Saunders of the National Consumer Law Center. “When you’re dealing with today’s problem, force yourself to think ahead to what you’re going to do next time.”
Start an emergency fund today. If $500 would have gotten you out of this jam, aim for that. Long term, you’ll want to save three months’ to six months’ worth of expenses.