No matter how carefully you budget, there may be times when you need emergency cash. It can happen if you lose your job, have sudden medical expenses, or the car breaks down. A recent CNBC article noted that 56% of Americans could not cover an unexpected bill of $1,000. Millions do not have a savings account they can tap into. However, with some creativity, there are ways to come up with cash quickly.
Take Out a Loan
Depending on the amount needed, a loan can be the easiest and fastest way to get cash. A loan for a few hundred dollars is inexpensive and can be repaid quickly. Homeowners can often use their equity to borrow more significant amounts.
If you need a loan fast, getting a signature loan and having the money deposited into your account within a day or so is possible. Many online lenders offer a simple application and approval process. Although terms vary, they are typically reasonable.
A home equity loan, or HELOC, is more complex but a better choice for those who need more significant sums of money. Mortgage companies and banks are familiar sources of home equity funds. One benefit of the loans is that they are repaid over a long period and are usually less expensive than other alternatives. Per Forbes, your home is collateral for the loans, so keeping up with payments is crucial.
Borrow from a Retirement Account
Borrowing from your IRA or 401(k) account could generate significant cash. It’s not a complex process but does include conditions. Nerdwallet experts say you can often borrow from an IRA account yearly but only have 60 days to repay the funds.
If your employer allows 401(k) loans, borrowing up to half the balance could be possible. There’s typically a $50,000 maximum, but you could have as long as five years to pay it back. The loan may become taxable income if not repaid on time, and if you leave the company, you might have to repay the funds within a short time.
Sell Unwanted Belongings
Selling your things can be a quick and profitable way to earn cash. Numerous websites make it easy to list and sell almost anything. EBay is the most well-known. If you browse these sites, you may be surprised at how much people will pay for items that have been sitting in your closet.
You can also hold a garage sale. It’s more work to organize and hold a garage sale than to sell online, but you get a chance to clear out any unwanted items and can make a fair amount of money. Think about advertising your sale on Craigslist. If there is a local garage sale group, mention the sale on Facebook. You can also buy signs and place them in your neighborhood to point the way to your event.
Request a Forbearance on Some Bills
You may be able to delay certain payments and use cash for your emergency. Some businesses do not charge interest if you pay late, so it’s worth asking, assuming you could catch up with the payments. It’s also worth exploring whether lenders will work with you on debts like the mortgage or car payments.
There are many ways to generate cash in an emergency. Think about getting a forbearance on your bills or selling unwanted belongings on eBay or at a garage sale. You may be able to borrow from a retirement account. It is also simple to get a personal loan to cover unexpected expenses.
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