The only thing that you can really plan on is that things won’t go according to plan.
Life is infamous for throwing curveballs and catching people off guard. You can try to plan for any contingencies. You can even be sure to have a little money in savings for emergencies that pop up.
But even if you do everything right, you can still get taken by surprise. The worst part is that emergencies tend to be expensive. Sometimes more expensive than what you have on hand.
That’s where instant loans come in. They can be a good option to get cash quickly in time of emergency.
Let’s take a look.
What Are Instant Loans?
Instant loans are simply what they sound like. Ways to get cash in a hurry.
They aren’t one specific type of loan. Rather instant loans is a broad category that encompasses a variety of methods for borrowing money.
We’re going to talk about some of the methods you can use to get cash fast in a minute. First, let’s take a look at some reasons why you might need one.
What Can They Be Used For?
Instant loans can be used for pretty much anything under the sun. Most often, though, people use them for situations that pop up unexpectedly and they need a little extra cash. Some examples include:
There isn’t ever a convenient time to get sick. But somehow, medical emergencies always seem to pick the worst moments to appear. And they are never cheap.
Health insurance has been a huge concern in the US for many years now as medical costs continue to rise. In 2016, just under 28 million people didn’t have medical coverage.
But even people who have coverage often don’t have enough. In fact, about 28% of working-age adults were underinsured in 2016. And that number represents a 5% increase from 2014.
What do you do if you or a family member has an unexpected health need and insurance won’t cover it? Instant loans can often provide the answer. At least you can make the necessary payments as needed and deal with paying off the loan later.
Car repair bills
Car trouble is another problem that likes to rear its ugly head at the worst moments. If you’re like most folks you simply can’t go without your car.
You need to be able to get to work to earn the money you need to fix your car. But you can’t get there without your car and auto shops don’t like to fix cars and wait to get paid. Public transportation is not always an option either, depending on where you live.
Instant loans are the perfect answer to your quandary. You get the cash you need to fix your car and keep going to work. Then, you can pay back the loan once you get your next paycheck or two.
Unexpected travel needs
Sometimes unexpected travel needs arise. For example, what if a parent or sibling that lives in a different part of the country falls ill or even dies unexpectedly? You may need to go help provide care or make funeral arrangements.
Depending on where you need to go, airfare isn’t cheap. You may also be taking time away from work and other responsibilities. You need cash to do all that, but you don’t have it and your sick relative can’t wait for you to get it.
Instant loans are a great way to get the money you need. Once you take care of the emergency and get yourself reoriented, you can worry about paying back the loan.
If you own your own business, you are already aware of the volatile nature of entrepreneurship. Some months are great! Some are not-so-good. And some are downright disastrous.
You may suffer a sudden loss or unexpected bill that leaves your business reeling. You need a little cash to survive this rough patch.
But business loans are difficult to secure, especially at a moment when your business might not be looking too good. Even if you can get one, they often take too long to fund to be useful in your emergency.
Instant loans are a perfect solution. You can get cash quickly and don’t need to put down collateral.
Be careful, though. You should be reasonably sure that your business can come back from the hit. Otherwise, you’ll have not only a failing business but also another financial obligation to worry about.
What You Shouldn’t Get an Instant Loan For
You may be wondering, if it’s so easy to get instant cash why don’t more people do it? Well, as with anything in life, instant loans don’t come free. In many cases, they don’t even come cheap.
We’ll get more into this in a minute but many instant loan options are expensive. For the convenience of quick cash, no collateral, and lax credit score requirements, you pay a premium. This usually comes in the form of higher interest rates or loan fees.
For that reason, it is unwise to seek an instant loan for something that isn’t too pressing. Unless you’re willing to pay the higher price later to have whatever it is you want to pay for right now. Only you can decide if it’s worth it to you.
How Can You Get One?
If you decide that you need to get an instant loan, how can you do it? There are several options available to you for getting cash fast. Let’s look at some common ones.
Credit Card Cash Advance
If you have a credit card (that isn’t maxed out) you can get a cash advance. This is super fast and easy. All it takes is a trip to the bank. You can even do it yourself at an ATM.
But you should take a moment to read the terms and conditions. This is a fast, but very expensive way to borrow money.
The APR will usually be higher than your regular credit card APR (which may already be pretty high!) And it is subject to a lower limit than your normal line of credit.
Payday loans are quick and usually offered in low amounts. The idea is that you will pay it back the next time you get paid. You’ll probably pay a lower APR than the credit card advance, but it will still be rather high.
A paycheck advance is similar but comes directly from your employer. Some employers are willing to give you an advance on your next check. This is a handy, and usually more inexpensive, way to get cash.
Employers have different requirements, however, so check your company’s policy. There is often a limit based on the size of your average paycheck. Also, they may have restrictions on how often you can ask for an advance.
Home Equity Loan/Line of Credit
If you own enough equity in your home, you may be able to take out a home equity loan or line of credit. The interest rates are generally pretty low because you’re using your home as collateral. That also means that you need to be able to pay it back because your house is on the line.
You can even open a line of credit and have it available for emergencies. That makes this method quick and inexpensive, as long as you pay it back on time.
What if you don’t have enough equity in your home, need more money than your next paycheck, and don’t want to pay outrageous APR? Online loans may be a good option for you.
In many cases, you can get an online loan even if you don’t have an amazing credit score. But you won’t get stuck paying a super high interest rate.
You don’t even have to go into a branch. You can do all the paperwork online and have the money transferred into your bank account.
Friends or Family
Asking friends or family for a loan can be a sticky subject. Many relationships have been ruined over a few hundred dollars.
However, if there is someone you can ask, it may be a good option. You’ll certainly get a better interest rate (or none in many cases) than a bank will offer.
Be careful, though. Be sure to write out the terms of the loan so there are no misunderstandings later.
Treat this loan with the same seriousness you would treat one from the bank and pay it back on time. Friends or family members don’t want to feel like you’re taking advantage of their goodwill.
Your Best Loan Option
There is no one-size-fits-all loan option. But with all the options that are out there, you can find one to fit your needs.
Here at Bonsai Finance, we offer a range of loan products. One of them may end up being the perfect answer to your predicament. Feel free to reach out to us to learn more.
To learn more about personal finance topics and how to manage your money well, check out our learning center.