Every now and again, we all experience an unexpected bill in the mail. For some, surprise expenses come from medical care provided but not fully covered by insurance, and for others, a pricey car or home repair may be the culprit. Regardless of the cause, having to shell out a significant amount of cash can be a challenge. Most American consumers do not have enough cash set aside in a rainy day fund to pay for these large, immediate costs out of pocket. Fortunately, several sources of cash exist if you know where to look.
Tapping Your Personal Network
Asking friends, family, and even co-workers for money when things are tight can feel like an embarrassing task, but your personal network can be a more cost-effective way to borrow money in a short period of time. To ensure you aren’t overextending your ask, only request the amount you truly cannot cover from a paycheck or savings, and offer to sign a promissory note detailing how much you borrowed and when you plan to repay the amount in full. If your family or friends are willing to lend you funds in an emergency, be sure to agree to a repayment amount that fits your budget moving forward each month. Failing to repay may not have a negative impact on your credit, but it will certainly damage relationships that could be hard to mend.
Fast Cash through Lenders
Your next best bet in getting the funds you need to cover unexpected expenses in a hurry is a conventional lender. When you have strong credit, meaning you have no recent missed payments on debts, no maxed out credit cards and no collections accounts, you may be best served with a personal loan through a bank or credit union. A personal loan does not require any collateral, only your promise to repay the amount borrowed, plus interest, over a set period.
If your credit isn’t so hot, or you have access to collateral like a vehicle or your home, other lending options may suit you better. For instance, a local lender that offers car title loans Los Angeles can use the equity in your vehicle to offer a loan, without a credit check. Other alternative lenders, like those found online, may offer bad credit loans without collateral, but a steady income and proof of earnings may be required. No matter which lender you use for your emergency cash needs, be careful to borrow only what you can afford to pay back easily.
Selling Unwanted Items
One less common way to get access to money when emergencies arise is unloaded unwanted or unnecessary items from around the house. In addition to traditional pawn shops and consignment businesses, there are now several online outlets that allow you to post items for sale to the masses. With either option, remember that the point is to generate money to cover your expenses – not necessarily make a fortune on an old, unwanted piece of furniture or clothing. Set your expectations to be realistic if this is the route you choose.
Getting hit with a surprise bill is never a comfortable feeling, but recognizing the options you have makes navigating the situation much easier. Consider who you could personally borrow from, or the local lenders in your area who could lend a hand. Follow these strategies up by unloading unnecessary items for cash, and you should find you have what you need to pay what’s due.