What to Do If You Need Cash In a Pinch

According to a recent survey, more than half of American adults today are living from one paycheck to the next, with little financial buffer or savings in place. If an unexpected expense was to crop up, many of these individuals would have a tough time finding the cash to cover it, while also not disrupting their monthly budget or adding unnecessary high-interest debt.

And let’s face it, there are many circumstances where you might need extra money throughout the month. 

Why You Might Need Quick Cash

The reasons people might find themselves needing cash include:

• Monthly bills that wind up higher than expected

• Unexpected repair bills (for your car, home, etc.)

• Medical or dental emergencies

• Paying for gas to get to work or school

In addition, there are less pressing reasons you might need cash in a pinch. For example, you may want to plan a romantic night out with your significant other, or need to purchase a birthday gift for someone special.

Regardless of why you need the funds, there are a few different options for actually getting that cash in-hand.

Common Quick-Funding Options

Find yourself short on funds for a sudden expense? Here are the most common sources of quick cash.

Use a credit card. Whether you need to cover unexpected expenses or make a larger-than-planned purchase, a credit card can be an easy way to finance the transaction. With a credit card, you’re making your purchase with borrowed funds; if you repay the amount in full fast enough (i.e., by your due date), it won’t cost you anything extra. A credit card however, is only a quick solution if you already have an account. Applying for a new card can not only take time, but often requires a hard credit inquiry. If you don’t pay off your balance before the next due date, you’ll also incur interest charges on the balance.

Apply for a personal loan. A personal loan can give you access to literal cash, for whatever situations or financial needs you may encounter. These loans allow for bigger borrowing (depending on the applicant), are repaid over time through equal monthly installments, and typically have lower interest rates than credit cards. However, personal loans are subject to both credit and income requirements for approval. 

Understanding payday loans. Payday loans offer short-term funding for borrowers in a pinch. These loans are usually very small (a few hundred dollars or so), and are scheduled to be repaid on the borrower’s next payday. However, payday loans often come with much higher interest rates than other options, even credit cards. In fact, a typical payday loan can easily have an APR of roughly 400%, compared to credit cards which average between 12% and 30%.

Consider a cash advance. If you are looking for quick cash and don’t need to borrow too much, a cash advance is another potential option. A cash advance is essentially a short-term loan that can be used for any purpose. 

Offered by MoneyLion, Instacash is a cash advance service that allows borrowers to take out up to $250 instantly with no interest charges, no fees (when deposited into a MoneyLion account), and no credit checks. Once borrowers link a checking account, they can take out a 0% APR Instacash advance. The funds are deposited directly into a MoneyLion or external bank account, in as little as 12 hours.

Things to Consider Before Borrowing

Before you borrow, there are a few considerations to keep in mind:

• How much you need. If you only need to borrow a few hundred dollars, a 0% APR cash advance like Instacash may be the best option. However, if you need thousands of dollars (or more), a personal loan or credit card may work better.

• Credit score. Your credit score will usually be taken into account when applying for a personal loan or new credit card. If you have poor credit (or no credit), you may not get approved for the funding you need.

• Cost. The average APR on a credit card ranges from 12% to 30% (or higher), while a payday loan can easily cost you up to 400% on the borrowed amount. Consider how much your quick cash option will cost you before you borrow.

• Speed of funding. Do you absolutely need cash today, or can you wait a few days for an application and funding process to complete? Applying for a new loan or credit card can take days (or longer), while some cash advances can be in-hand within hours.

Bottom Line

Sometimes life happens unexpectedly. If you find yourself needing to borrow a manageable amount of money, there are a few different financial products to choose from, including credit cards, personal loans, payday loans, and other options like Instacash. The right choice for you depends on how much money you need, how quickly you need it, your eligibility, and what it will cost you in the end.