Fast cash is so important to have when the unexpected occurs. Whether it is for an unexpected expense or simply to make ends meet, making sure to have cash when you need it, is a must.
However, getting fast cash with poor credit can be quite a conundrum for many who find themselves in this scenario. There are a few choices that may be available for those who have poor credit, but not all of them are choices that you may want to take. Many fast cash options can trap you in a cycle of debt, and impact your finances long-term.
When the choices for fast cash are narrowed down, there are four recommended options for individuals with poor credit. A thing to remember is that because you may have to improvise when you have bad credit, these routes may be far from perfect, but when done carefully and responsibly, can get the job done without turning your finances upside down.
Take a look at these four ways to get fast cash and decide for yourself if any of them sound right for your individual finances and borrowing needs.
Getting Fast Cash Despite Poor Credit By “Doing it Yourself”
For many people, finding a way to fix their current financial problem themselves may be their first instinct. The next two possibilities might sound a little too-obvious, and may have briefly crossed your mind already, but you may want to seriously consider them. This is especially true, if you don’t need hundreds of thousands of dollars (which most people don’t).
Here are a few ways of getting fast cash yourself:
1. Pawn/Sell Your Items
Chances are that you have valuable stuff sitting around. If you do possess some valuable items and are willing to part with them, then simply selling your stuff may be a good option to consider.
Although it may take some time to find a buyer on your own, and there is always the risk of selling to a stranger.
A pawn shop on the other hand, can make funding for items available right away. Here, you may be able to outright sell your items or get a loan for a fraction of the value of your belongings. The pawn shop will keep the item(s) until you pay back your loan.
Sounds good so far, but here is where this option takes a turn. Pawn shop loans have pretty high interest rates (15% to 275%), and with their loan length averaging to about a month, these types of loans can lead people into a cycle of debt.
2. Try and Monetize any Skills or Hobbies
Have some kind of skill or hobby that others may want to experience or see? Well now may be the time to try and turn that skill into cash. Whether it is art, gaming, technology, or sports, all these interests can be monetized.
Like selling your stuff, this may take some time. Additionally, it can be a fairly abstract idea to manifest, and so it may not be the most practical option for everyone.
Although attempting to solve the issue of fast cash yourself comes with flaws, a lot of people like solving problems themselves because they find it rewarding and empowering. Additionally, any debt acquired with a pawn shop is fairly low when compared to other choices out there.
Turning to Family, Friends, or the Internet for Fast Cash with Poor Credit
This option requires careful maneuvering, honesty, and an open-mind in order to ask for help. Furthermore, depending on who is in your inner circle of friends and family, this option may not be available for everyone.
Asking for money can be difficult, especially if the person lending the money is not-so-enthusiastic about giving it out. But asking for cash can be one of the best ways to get fast relief, even more so when you have bad credit.
With family and friends, there is usually no interest involved, and chances are they may be more understanding and flexible with repayment—especially if they know your financial background. Lenders that are businesses/companies will generally not be as understanding as someone you know personally.
Other than asking for money, this option doesn’t sound too bad, right? Well although this option is strong, there are definitely some negatives with it.
One thing to consider is the possibility of straining a relationship with a family member or a friend. Even if you pay the loan back, depending on both of your temperaments, the fact that this exchange even happened can change the relationship dynamic.
A good idea to prevent this strain would be to make the borrowing process as official as possible. You can do this by establishing a contract which both parties sign and agree on.
3. Fundraising on the Internet
For those who do not want to single out one family member or friend, fund-raising online can be a viable alternative. You could ask strangers and people in your social media circle for small donations until you reach your goal—but make it clear that the money will not be paid back.
Go-fund-me is a website that provides a platform for exactly this kind of service, and there are many other similar sites out there. Additionally, you can set up the date that you need the funding for—although this does not guarantee that you will receive the money in time. Fundraising can be a little risky when it is the sole route you are pursing in order to get your cash, but if you have time, give it a try.
The thing about finances—whether going good or bad—is that money will impact other aspects of your life, including relationships with family and friends. When borrowing money from family or friends, you are creating a bridge, and so it is crucial that you uphold responsibility to take every precaution to ensure things start, progress, and end on a positive note.
4. Getting a Cash Advance with Your Credit Card
The good old credit card, which can be used for all kinds of purchases, could in this case help you obtain fast cash. This is one of those options to consider when the options above have fallen through—simply because it could lead to an imbalance of your credit to debt ratio, which largely impacts your credit score health.
For those who do not have a credit card, there are all kinds of credit cards available for those with poor credit—though they are usually secured with an asset or deposit.
Cash advances from a credit card will work similarly to withdrawing money from a checking or savings account with your debit card. But in this instance, the money will be borrowed from the credit card company rather than one of your personal accounts.
There are a few things to look out for when using a credit card for a cash advance:
- The Amount That Can Be Withdrawn—Almost all credit cards will have a limit on the amount of cash that you can take out at one time, make sure to pay attention to that. And when the cash advance doesn’t fulfill all your lending needs, assess whether taking out a portion of that money is worth it.
- The APR/Interest Rate—Most people already know about the interest rates and APR (annual percentage rate) on their credit cards, however with cash advances the APR may be different. Additionally, the APR will generally begin to cumulate right away. The average cash advance interest rate is about 24%.
- The Cash Advance Fee—There will almost always be a cash advance fee to look out for when withdrawing cash from a credit card. This will usually be about 5% to 10% of whatever amount is being withdrawn.
- Any Additional ATM Fees—Depending on both the credit card and the credit card lender, there may be some small fee for withdrawing your money, this can range from about $3 to $10—still something you might want to keep in mind.
If you have more than one credit card, and have decided to choose this route, ideally you will want to go with the card that fulfills your lending needs, has the lowest interest rate, and the lowest cash advance and ATM fee.
Sometimes, it may be hard to find a credit card that checks everything on this list. When you need to compromise, do so with all the factors other than the interest rate. As the pattern goes with most lending, the interest rate will be the most expensive cost associated with the cash advance, and is usually the factor that leads to a cycle of debt.
Obtain a Loan Despite Having Poor Credit
As you may already know, traditional lending can be next to impossible when you have poor credit history. This is because poor credit, no matter what reason, is like a red flag for lenders and is considered a huge risk for them to be taking on.
But it may be possible to obtain a loan despite having poor credit. Loan lenders with flexible qualification requirements are usually more willing to take risks with lending. But for their protection, lenders may require an asset or deposit (i.e. secured credit cards for poor credit).
Here is a brief overview of loans that may be worth looking into:
Loan Options for Individuals with Poor Credit:
- Installment Loans— Installment loans are a type of loan where the lender gives the borrower a loan which the borrower pays monthly until they repay the full cost of the loan.
There is a set schedule for the amount that you will have to pay every month. Because of this, a borrower does not have to worry about having to pay it all back in one-lump sum or through large deposits at a time.
- Secured Personal Loans—Personal loans can be borrowed for a variety of reasons. If an inquirer has poor credit, they may be able to use an asset to secure the loan.
Because there are many personal loan lenders out there, it can make finding lower interest rates and fair terms much easier. Personal loans, like installment loans, are usually long term.
- Car Title Loans— Car title loans use the equity of the car to make quick funding available for the borrower—often in as little as one day. Depending on the lender, you may even get to keep driving your car while making convenient monthly payments.
These loans usually have repayment terms that range from one month long but can last much longer depending on the terms agreed upon by both the lender and the borrower.
- Payday Loans—Payday loans are a short-term loan, but instead of lasting a month or two, they are generally two weeks long. These loans are usually a few hundred dollars and are expected to be repaid when the borrower receives their next paycheck.
Although payday loans may seem like an easy solution, lenders request a large amount of money quickly. Not to mention, some lenders may ask for your banking information so they can pull directly from it.
With these types of loans there is almost always a game of “catch-up,” and it can become very difficult to pull yourself out from relying on the loan. If you choose to obtain a payday loan, make sure that you can repay the full cost within 2 weeks.
No matter what loan option you choose, make sure to do extensive research on the lender and the loan type. Additionally, pay attention to all the repayment terms including interest, due dates, monthly cost, and duration of the loan.
When you have poor credit and need fast cash, consider taking out a loan with more favorable approval rates. You may have to use an asset, such as your car, but you could obtain fast funding in no time if you are approved.
These loan options could help individuals with poor credit acquire the financial support they need, when they need it. If you do obtain a loan, make sure to organize your budget so that everything gets taken care of and your finances can become more stabilized.