Most of us will encounter a financial emergency at least once in our lives, and we don’t always have the cash on-hand to cover the expense. The good news is that there are many different ways to borrow money fast.
Here are suggestions for the best ways to borrow money—in a hurry—based on your personal situation.
There are several different ways to borrow money quickly if you find yourself in an unexpected financial emergency. From paycheck advances to lines of credit to payday loans, you can often get funds in just a few business days. But be careful to check interest rates and fees to know the full cost of the loan.
What Are the Different Ways to Borrow Money Fast — Within a Day or Two?
1. Loan from friends or family:
It might be difficult to ask, but borrowing money from friends or family is one of the safest options. Keep all parties happy by following a few simple tips:
- Set a fair interest rate
- Put the agreement in writing
- Establish a formal plan for monthly payments, including due dates and late fees.
2. Paycheck advance from your employer:
Your employer may be able to offer you a paycheck advance, which is when you receive your paycheck ahead of schedule. This is a type of loan that you would repay by deducting the amount of the loan from your next paycheck. Some employers charge a fee, cap the advance amount at a percentage of your regular paycheck, or limit how frequently you can request an advance. If you leave the job or are laid off, you might have to repay the amount before leaving.
3. Credit card cash advance:
Most credit cards will let you instantly withdraw cash at an ATM or bank—if you have credit available to tap. You’ll pay a transaction fee plus interest at a rate that is usually higher than the card’s regular annual percentage rate (APR). Cash advances are generally limited to an amount that’s less than your credit limit.
4. Payday loan:
Payday loans are short-term loans, usually for an amount less than $1,000. Lenders typically charge a fixed fee based on the amount borrowed, and you have until your next payday to pay off the amount borrowed plus the fee. Payday loans are one of the easier ways to borrow money fast but be wary of fees and high-interest rates. Make sure you know — and can afford to repay — the total loan balance before you sign for the loan.
5. Online loan:
With an online loan, you can borrow a few hundred to several thousand dollars. Applying online makes it fast, and you can usually get the money within a day or two. Most online, non-payday loans are installment loans, which means you’ll make regular payments on a fixed schedule over the next few months to a few years.
6. Auto title/pawn loan:
An auto title loan is a type of secured loan using your car title as collateral. If you own your car outright, you can drive away with cash after an appraisal. The lender keeps your car title until you repay the loan. If you don’t pay it back, you could lose your car. A pawn loan works in a similar way, but with a different object of value (for example, jewelry) put up as collateral.
7. Financial aid:
If you’re in college, check out your school’s financial aid department to see if they offer short-term loans. Some financial institutions also offer private student loans, though the interest rate may be higher.
8. Alternative sources:
Amrita Jayakumar at NerdWallet suggests checking out nonprofits and religious organizations in your community who may be able to help with emergency funds. Service members, veterans, and their families are often eligible for short-term loans with lower APRs than other alternatives. State and federal programs can also help with certain bills.
What Are the Different Ways to Borrow Money Within a Few Days to a Few Weeks?
9. Peer-to-peer lender:
Peer-to-peer lending platforms offer short-term personal loans online, with an individual investor loaning you the money instead of a financial institution. Loan amounts are typically $1,000 and higher. Your credit score will come into play here, and the process can take some time. After your application is approved, the loan is added to the platform. Once it is fully funded by investors, the money shows up in your bank account. APRs can be lower than traditional bank loans.
10. Personal loan from bank or credit union:
If you need to borrow less than $3,000, a personal loan from a credit union could be an affordable option. Federal credit unions have a cap of 18 percent APR (annual percentage rate) on most loans (short term loans and state union rates could be higher), and not all credit unions consider your credit score and income when issuing personal loans. On the other hand, traditional banks generally place heavy emphasis on your credit, and often only offer loans for $2,000 or more.
11. 401(k) loan:
If you have contributed money to a 401(k) retirement plan, you are generally allowed to borrow up to 50 percent of the account value, with a maximum of $50,000. Interest on the loan is set by your employer and is put back into the 401(k) account. You typically repay the loan via paycheck deductions over a five-year term. Unlike other borrowing options, 401(k) loans aren’t reported to credit bureaus, so your credit score won’t be checked or impacted. If you don’t repay the loan, you’ll have to pay taxes on the amount and possibly an early withdrawal penalty. Similarly, if you leave your job, the loan must be repaid within a few months or you’ll face taxes. You may also be able to take a hardship withdrawal from the plan under a limited number of circumstances.
12. Life insurance loan:
Borrowing from the cash value of your life insurance plan has some advantages, including no application or review of your credit history, and no fixed repayment schedule—you repay it on your own time. On the downside, if you don’t repay the loan, the policy’s death benefit is reduced. And because it takes time for the cash value to grow, the amount available to borrow may be small in the first years of your policy.
13. Home equity line of credit (HELOC):
This line of credit uses your home as collateral. You borrow only what you need, up to a certain limit, and pay interest only on what you’ve withdrawn. Using your home as collateral does come with major risks—if you’re unable to repay the loan, your creditor can foreclose on your home or seek a court judgment against you. Homeowners also typically need good credit to qualify for the lowest rates.
14. Personal line of credit:
You might also consider using a line of credit that doesn’t require collateral. Personal lines of credit often require strong credit scores and can be relatively difficult to obtain. Because there is no collateral, the interest charges on a line of credit are generally higher than other types of loans. These loans are commonly used by people with irregular pay schedules, or people facing a large expense with an unknown total cost (a wedding or medical bills, for example).