Alternatives to a loan when you need cash fast

Need some extra cash fast? When you haven’t got any money in the bank, taking out a loan can often be tempting. However, there are many other ways in which you can raise funds in a hurry.

This guide details some of the best alternatives to a loan if you need money fast.

What’s wrong with taking out a loan?

Payday loans are a popular option for people that need money quickly. These loans instantly transfer money into your account. However, this is money that you have to pay back – often with high interest fees attached.

Loan repayments will eat away at your monthly disposable income and you’ll be paying unnecessary extra money in interest. This is why loans are best avoided. The same goes for other forms of borrowing that have interest charges such as credit cards and overdrafts. 

There are some quick-paying loans with very low interest rates, but these tend to only be offered for certain emergency situations like medical bills or funeral bills. Slower-paying loans can also have lower interest rates, but these are unlikely to be much help when you need access to cash fast. The majority of emergency loans have high interest rates. This is especially the case if you don’t have a low credit score.

What are some alternatives to a loan?

Thankfully, there are many alternative ways to raise funds quickly that don’t involve having to pay interest fees. These can be worth exploring before you resort to a loan. Some of these alternative options are described below.

Use your savings

Ideally, everyone should have savings set aside for emergencies. If you’ve already got an emergency savings fund, consider whether it’s worth dipping into this. 

There may be times when you don’t want to use your savings – particularly if you’re saving up for an important goal such as buying a house or paying for a wedding. In these cases, weigh up just how important the cause is. An emergency vet bill for a beloved pet may be worth dipping into your savings for. Buying a new TV is less of an emergency. 

Ask to pay in installments

Depending on what you need cash for, there may be instances when you can pay in installments without having to pay interest. Dentists, car repair centres and plumbing companies are just some of the businesses that may allow installment plans – usually if it’s an emergency service that they’re providing. Don’t be afraid to ask about paying in installments to see if it is an option. 

Sell your clutter

One nifty way to raise funds quickly could be to sell possessions that you no longer want. This could include books, sports equipment, musical instruments, toys or clothes.

There are lots of online sites that you can sell your items on such as Gumtree, Craigslist and eBay. You could also try selling on Shpock, which is an app that allows you to connect with buyers locally. Alternatively, you could try selling items to second-hand stores in your area. You could even attend a car boot sale. 

Take up odd jobs online

You may be able to find jobs online that pay within the same day. You may not be able to make a lot of money doing these jobs, but it could help you to save up a little to go towards your cause.

A few ways to make money online could include answering surveys, writing blog posts, creating logos, selling photos and doing people’s online shopping for them. 

Ask your employer for a cash advance

Another option could be to ask your employer for a cash advance. This is when an employer agrees to give you a portion of a future paycheque. This is then deducted from your future wages.

Asking an employer for a cash advance is likely to be easier if you are on friendly speaking terms. Most employers will be willing to offer you the money in advance, although it may depend on how much you ask for.

Borrow from family or friends

You could consider borrowing from family or friends. While technically a form of loan, your family and friends are unlikely to demand interest. You may also have great flexibility when it comes to paying back the loan.

Asking friends and family for money can be difficult. If you already owe money to family and friends, they may not be as willing to lend you money. Make sure that you deliver on your promise and pay back any money that you borrow – you don’t want your relationship to be damaged because of an unpaid loan. 

Call in your debts

Do any family members or friends still owe you money? Now could be a time to call in your debts. This may allow you to raise the funds you need.

Some people may not be able to pay you back the money immediately. Be honest about how urgently you need the money, but be understanding of the fact that they may not have any money to pay you back. In other words, ask but don’t try to demand that they pay the money back.

Ask bill providers if you they delay your bills

Got some money in your account, but need to save it in order to pay an upcoming bill? You may be able to talk to your bill provider and arrange for your bill to be delayed. Some bill providers may be willing to oblige and won’t charge you late payment fees so long as you request the payment date to be moved in advance. 

Preventing the need for emergency cash

There are many things that can cause us to need to cash in a hurry. This could include unexpected costs such as home repairs, car repairs or vet bills. In other cases, it could just be the result of poor budgeting – we may have to pay a bill, but may realise that we’ve overspent that month.

In some cases, these situations can be avoided. You may be able to avoid having to scrape together money for an emergency vet bill by taking out pet insurance. Similarly getting a boiler inspected annually could allow you to spot problems early, which could avoid you being caught out by a surprise boiler breakdown that then requires a replacement.

When it comes to poor budgeting, it could be a case of simply getting into a habit of tracking your expenses. There are many apps that can help you to create monthly budgets. By planning every expense ahead – no matter how small – you can avoid having to resort to emergency cash options like loans. 

As already mentioned, setting aside savings can also be beneficial. Consider opening up a savings account purely for emergencies. This could be a high interest savings account that accumulates money over time on top of the money that you put in. 

Photo by Karolina Grabowska