When you need fast cash, you probably don't have the time to go through the sometimes onerous process of applying for a traditional bank loan. Other faster lending options are out there, but they may charge higher interest rates than more conventional lenders.
Home Equity Line of Credit
A home equity line of credit lets you borrow against a portion of the value you have in your home, minus whatever you owe on your mortgage. To qualify, you may need to pay for an appraisal. Loan terms and interest rate vary based on how much you borrow and what your credit score looks like.
When you establish a home equity line of credit, you generally can access it as necessary. To get a loan fast requires that the line be established prior to needing it, or it could take as long to process as a more traditional loan.
Personal Line of Credit
Your bank may offer a personal line of credit that allows you to borrow up to a certain limit without having to go through a formal loan application process. The terms of this type of loan usually are based on your borrowing history, and your bank may require it to be tied to a checking or savings account with the same institution. Loan amounts vary and likely will be based on your credit history, the amount of your verified earnings and your relationship with your bank.
Pawn Shop Loan
If you have anything of value you don't mind using as collateral, a pawn shop loan is a fast way to get cash. Pawn shops usually loan about 50 percent of the value of an item, and most give you several months to repay the loan, plus interest, to reclaim your merchandise. If you don't pay, the shop reserves the right to sell your goods to recoup its investment. You'll need proof of identification to pawn an item.
Read all terms and conditions carefully before signing any binding contractual agreement.
Credit Card Advance
If you need short-term fast cash, consider a cash advance from a credit card you already have. If you have a good payment history with your card issuer, you may be able to get your credit line increased so you can access extra funds. Many credit card issuesr
Pay down the balance on your card as soon as possible to avoid interest charges.
Payday or Car Title Loan
Payday and car title loans should be last resorts when you need to borrow money fast and have exhausted all other options. Both loans carry high interest rates and require repayment in a short period of time, or interest and penalties can compound. With a payday loan, you'll have to show proof of a typical paycheck and provide the lender with your pay date. The idea is that you borrow cash just until you next payday, but you'll pay a large fee for the opportunity. With a car title loan, you allow a lender to hold the clear title to your vehicle as collateral on a loan. If you default, the lender has the right to take possession of your car.
- The Federal Reserve Board: What You Should Know About Home Equity Lines of Credit
- Bankrate: Borrowing with Personal Lines of Credit
- National Pawnbrokers Association: Six Things Everyone Should Know Before Going to a Pawn Store
- FTV.gov: Payday Loans
- FTC.gov: Caution -- Car Title Loans Can Leave You Stranded