If you need money quickly —say, for an unexpected home or car repair or medical expense—there might be more than one viable option available to you. Here are seven ways you might be able to get money right now if you need it.
Of course, not all options will be available or desirable to access quick cash for everyone. But the hope is that the list can help you evaluate your options, so you can choose the best course of action for your needs.
1. Emergency savings
If you need cash for an unexpected expense, the ideal way to get it is from savings. In fact, the central goal of having an emergency fund is to be able to access money when you need it without having to borrow money or sell something. However, more than half of Americans have under $1,000 in their emergency savings, so this isn’t an option for everyone, especially for large unplanned expenses.
2. Personal loans
Personal loan lending has evolved by leaps and bounds over the past decade or so. It used to be an uphill battle filled with several bank visits, collateral documentation, and more to get a loan that wasn’t backed by a home or vehicle, but the process has improved. There are some excellent companies that facilitate personal loans quickly and easily, and while some fund instantaneously, many personal lenders will send your money the next business day.
It’s also important not to ignore this option if you have less-than-perfect credit. There are some excellent personal loan companies—including lending marketplaces like Upstart—that look beyond an applicant’s credit score and focus on their entire situation when making personal loan decisions.
3. Credit card cash advance
Most credit cards allow account holders to receive cash advances. Your cash advance limit might be lower than your standard credit limit, but there’s usually some ability to withdraw cash.
The main drawback is that credit card cash advances tend to be very expensive relative to other borrowing options. Credit cards are known for their high interest rates to begin with, and most have a separate (higher) interest rate for cash advances—often 29% APR or higher.
One possible exception is if your credit card provider offers promotional cash advances. For example, you might receive checks in the mail linked to your credit card account that offer 0% APR financing for a certain period of time, in which case it may make more sense as an option.
4. Home equity loan or HELOC
If you own your home, tapping into your equity can be a smart way to get money when you need it. A home equity loan allows you to borrow a set amount of money with a specific repayment term, and is often referred to as a second mortgage. On the other hand, a home equity line of credit (HELOC) gives you the ability to borrow money against your home’s equity, up to a certain limit. HELOCs generally have variable interest rates and low minimum payments.
The primary reason to use a home equity loan or HELOC when you need money is that it is usually a lower-interest form of borrowing than alternative types of loans or credit cards. The reason behind this is the same one that explains the difference between average mortgage interest rates, which are about 6.5% as of this writing, and average credit card interest rates, which are about 24%. Since the loan is backed by the value of your home, it represents a lower risk to the lender.
5. Gig economy/freelancing
Loans can be effective tools, but there are more options than ever when it comes to picking up additional work if you need money. You could drive for a ride-sharing service, fill orders for a grocery delivery service, do on-demand food delivery, or pick up other gigs. Or, if your job skills translate well to freelance work, there are marketplaces that feature thousands, if not millions, of freelancing opportunities you could explore.
6. 401(k) loans
If you have a retirement plan such as a 401(k) at work, you might not realize that most of these plans allow participants to borrow money from their account. Now, the specifics of 401(k) loans depend on your specific plan, but you can generally borrow up to 50% of your account value. You’ll pay yourself back over time, with interest, through payroll deductions, and the interest rates on 401(k) loans tend to be far lower than what you’d get from a credit card or most other forms of borrowing.
Now, there are drawbacks to borrowing against your 401(k) loan. Specifically, the money you borrow won’t be invested for your retirement and could set your account back by losing years of compounding power. Think of it this way—what if you borrow half of your 401(k) tomorrow and the stock market proceeds to rise by 50% over the next couple of years? You’d miss out on gains. However, if you understand the downside risk, a 401(k) loan could be a valuable tool if you need money for an unexpected expense.
Crowdfunding isn’t the best option for all situations, but if you have an emergency expense, such as a medical emergency, and don’t have any other viable options, it can be a smart way to attempt to raise the money you need from your social circle and family.
Not an exhaustive list
To be sure, this isn’t intended as an exhaustive list and there could be other ways to quickly get money that apply in your situation. For example, you could look into selling items online if you have collectibles or other valuables. Or, depending on where you live and the nature of why you need money, you may want to look into financial assistance programs that might be available to you.
However, the methods discussed in this article are usable by a high percentage of people and are generally more desirable than selling things, going to pawn shops, or obtaining payday loans, all of which can have unwanted adverse effects on your long-term financial well-being and overall happiness.