If you need money in an emergency it can be easy to panic and quickly grab the first opportunity you can think of to get the money that you need. Sadly, this can lead to problems as it could be that you choose an unsuitable option because you have not had time to look through them all. Therefore, it is a good idea to plan in advance. Hopefully, most people will not be in a situation where they need money in an emergency, but there could be a chance that it will happen and if we are prepared, then we will be able to deal with it a lot better. There are lots of possible options we could take and a few of them are described below.
If you have any savings then it can be a good idea to use these rather than borrowing money. This is because you will find that it will be a lot cheaper to do this. Although interest is paid on savings, there is interest charged on loans and sometimes fixed fees as well. This means that you will normally end up paying more for a loan that you will receive on savings. It is worth checking this and if this is the case then it will be cheaper to use savings. It can be hard parting with our savings, especially if we have spent a lot of time saving hard or we were hoping to spend them on a specific thing. However, if you are determined, you could replenish them once you get past this emergency situation.
Credit Card/Store Card
If you have a credit card or a store card it might be able to help you out. Even if the money that you need cannot be provided using these cards, you might be able to use them to pay for other things and that will free up money that you can use for the emergency. For example, if you pay for your food with a credit card, then you will not need to find the money for that food so you can use that money instead to pay for the emergency. It may not be as simple as this, but it can worth thinking about. You can also draw out cash form an ATM using a credit card which might be helpful, This can be expensive though as you will start being charged interest right away and this means that you will need to check the cost and make sure that it will be a cheaper option compared to the other options that you have available to you.
An overdraft is something that many people have with their current account and the money can be access by drawing cash form an ATM, using transfers or other ways. It can be convenient but it is expensive and you will again, need to see whether you feel it will offer you good value for money.
If you have a poor credit record or have maxed out your overdraft or credit card, then payday loans might be one of the few options that you have. However, it can be wise t plan carefully and make sure that you have other options. So, try not to max out your borrowing or do what you can to improve your credit rating and then you might be able to get a credit card to keep handy in case of an emergency. A payday loan only helps in the short term as it will only allow you to borrow money until you next get paid. This means that you will need to think hard about whether you will really be helped by this type of loan. You will need to pay it back in full within a few weeks or days and this means that you will need to be well prepared and make sure that you will be able to afford to do this and manage the rest of your bills as well.