When Money Is Needed Fast

Few people these days have a savings account as a buffer when emergencies arise. Credit cards would provide options, but most people have spent their limits and cannot get cash advances. Family members and friends are rarely options because they live under the same circumstances. These situations present problems for average working people.

What to Do?

Those with decent credit ratings and not excessive amounts of debt can apply for bank loans. The process can take a week or more before approvals are granted. The benefits of going with this traditional route include low interest rates, favorable terms, and manageable payments. Bank loans should always be applied for first.

Non-Traditional Loans

Short term loans and pay day loans are often easier and faster for people to get. Approval ratings are very high, and decisions can be made on the same day applications are submitted. These lenders operate at both physical locations and online websites. These loans should last resorts for people due to the high costs associated with them.

Interest Rates

Interest rates for non-traditional loans are astronomical. People pay extreme prices for all that convenience and accessibility. A clear example is presented on the website for Moneyboat UK. A customer borrows four-hundred pounds (400) with four installment payments due. The interest rate is two-hundred and fifty-five point five percent (255.5%).

Each payment is set at one-hundred and nine point thirty-seven pounds (149.37). The total amount paid back is five-hundred ninety-seven point forty-eight pounds (597.48). The interest rate alone totals one-hundred ninety-seven point forty-eight pounds (197.48). Keep in mind that interest rates for pay day versions are higher than they are for installment loans.

How to Avoid the Dilemma

Taking an honest look at where money is going is the first step in avoiding the need for fast cash. Most people have no idea where all the money went after a pay day. What they do not realize is three pounds here and five pounds there adds up quickly. Suddenly, there is not enough money for bills, let alone anything unexpected.

Create a budget based on regular expenses and total income. Pay for essentials, place a small amount of money in a savings account, and only splurge if there is any money left over. It will be challenging, but it will also be worth any sacrifices that are made. Knowing there is money available in an emergency provides peace of mind and reduces stress. It also saves money on interest rates because no loans are needed.