Did you know only 39 percent of Americans can afford a 1000 emergency expense? If you want to learn what to do if you need emergency cash immediately, we can help.
In this guide, we’ll go over what to do if you need emergency money now.
Want to learn more? Keep reading.
1. Sell or Pawn Some Items
Do you have something valuable at home that you could sell? Bring your jewelry to a pawn shop or sell it to someone online.
Some people have items sitting in their garage, like electronics or tools they don’t use. Try to sell some of these items online. Go through your home and get rid of some of the clutter.
2. Health Savings Account
Do you have a health savings account? Withdraw money for eligible medical expenses. This could include prescription drugs, dental care, medical care, or long-term care services.
You are also able to place pre-tax income inside your HSA. You won’t have to pay taxes on the money if you withdraw it for qualified medical expenses.
When you turn 65, you can withdraw money without penalty. To avoid a penalty, you’ll need to pay income tax on the withdrawal.
Some people will contribute the maximum amount of money they can to their HSA. They choose not to take out cash from the account. The person chooses to pay medical expenses out-of-pocket.
If you need to withdraw money now for a medical expense, consider your HSA.
3. What About a Personal Loan?
Credit unions and banks will offer a personal loan to clients with a fixed interest rate. You’ll also receive a repayment schedule.
Personal loans are best for a one-time expense like a student loan or auto purchase. Think about how much you will be able to pay back each month. These factors are essential for getting a personal loan.
If you have decent credit, you will have a lot of options. If not, find a lender who will accept a poor credit score.
Don’t choose a lender who offers a fast loan without checking your credit. You’ll end up paying high interest rates. Find a reputable lender.
4. What About a Home Equity Line of Credit or Car Title Loan?
Consider a home equity line of credit. Your house is collateral for the loan or line of credit.
Manage your payments well. If you miss a certain amount of fees, the bank could seize your home.
If you use the money to improve your home, the interest payments could be tax-deductible. Rates tend to be competitive among lenders. Check with a few lenders before you choose someone.
Did you know you can also get money from a car title loan? You can still drive your vehicle, but the lender will hold onto your title. You will pay back the loan, and the lender will return your title.
Read about these requirements if you live in Georgia.
5. Peer-to-Peer Lending
Peer-to-peer lending websites connect a borrower with lenders. There might be individuals or groups willing to lend you money.
Interest rates will vary. The best rate will depend on your credit and the money you’d like to borrow.
6. Brokerage Margin Loan
Do you have a margin account at an online brokerage? Your brokerage firm will use investments in your account in order to secure the loan.
If you don’t end up paying what you agreed, the broker could seize the assets to cover what you borrowed.
The brokerage will end up charging you interest, but there isn’t a repayment schedule.
If the value of the securities you use as collateral declines, the brokerage could issue a margin call. This means you would have to sell some of your investments or deposit extra funds.
This is a risky move depending on your margin agreement; the brokerage might not give you that choice.
The brokerage might sell your securities to bring your account into good standing. You might end up selling investments at a loss.
7. What About Life Insurance?
Do you have a permanent life insurance policy that has cash value? You can borrow against it. A permanent life insurance policy could last your whole life as long as you continue to pay the premiums.
This policy differs from term life insurance. It covers you for a specific period and doesn’t have built-up cash value.
If you borrow from your permanent policy, the policy first needs to have accrued enough cash value. First, call your insurer if you’re not sure whether this is an option.
Borrowing will end up decreasing the death benefit if you die before repaying the loan. You could also face interest charges.
8. What About Social Security?
Are you at full retirement age? You could take a lump-sum distribution of up to six months of payments of Social Security.
How much you will take will depend on how far past you are from full retirement age. If you’re only six months past, you can only request up to six months of lump-sum benefits.
The cash at the moment can be helpful, but don’t choose this as a long-term option. It will end up decreasing your monthly benefit.
Now You Know What to Do If You Need Emergency Money Now
We hope this guide on getting emergency money was helpful.
If you need emergency money now, consider taking out a personal loan. You could also consider peer-to-peer lending or sell something you own.
Are you looking for more helpful tips? Check out our resources on personal finance.
