5 Best Ways to Borrow Money Now During a Crisis
In March 2020, more than 700,000 jobs were cut because of the coronavirus. This number continues to rise as uncertainty about the length of lockdown grows.
Stay encouraged during these tough times. Though many people are struggling to make ends meet, there are ways to borrow money now if you are in crisis. Check out this list of 5 ways to get a loan with no job.
1. Online Lenders
If you need to borrow money now, there are few ways faster than using an online lender. Online lenders aren’t the same as traditional banks.
Even if you complete an application for a traditional bank loan online, you still have to wait for it to go through the standard review process. Online lenders can tell you within days, sometimes minutes, whether you’re approved for a loan.
Having a job is helpful, but not required to apply for an online loan if your spouse is still working. The most important factor is whether lenders consider your credit score and overall household income.
It is usually believed that, with good to excellent credit, you’ll qualify for the lowest interest rates and fees. This may not be something that all lenders follow. There are Lenders who provide loans for people with bad credit that are also easy to qualify for. Online lenders usually offer a range of repayment options and loan terms so you can choose the plan that best fits your needs.
2. Self Employed Loans
The SBA, or Small Business Administration, is offering emergency loans to self-employed people who need to borrow money now. There are two options available as of April 3, 2020:
- Paycheck Protection Program
- Disaster Recovery Loan
Both of these loans are available to you if you are self-employed, a freelancer or an independent contractor. The Paycheck Protection Program covers the cost of your typical salary amount before the COVID-19 lockdown.
The Disaster Recovery Loan application is available online now through the Small Business Administration website. The application gives you the option to request an immediate loan advance of $10,000.
3. 401(k) Loan
One of the easiest ways to get quick small loans is borrowing from your 401(k). The interest rate is reasonable compared to other short-term loan options and you don’t need good credit or a job to qualify.
If you don’t have a job though, you might face additional early withdrawal penalties or have to repay the loan in a shorter window of time. Use a 401(k) loan as a last resort when looking for ways to come up with quick cash because it means taking money away from your future retirement.
If you have equity in your home, you can borrow money now using a Home Equity Line of Credit (HELOC). A line of credit is similar to a loan in that it allows you to borrow money, but it actually works more like a credit card.
Instead of receiving a lump sum of money and repaying it in installments, you get access to a certain amount of money and use it as you need it. You repay only the money you borrow.
5. Credit Card Cash Advance
Use a credit card cash advance to get access to cash using an ATM. You’ll need a PIN from your credit card company if you didn’t receive one when you opened the account.
But keep in mind that the interest rate on cash advances is much higher than the APR on your regular credit card balance. Cash advances are one of the most expensive ways to borrow money.
Ways to Borrow Money Now
If you need to borrow money now, there are dozens of lenders and credit card companies available to offer you access to quick cash. Easy money does come at a cost so make sure you read the fine print before signing any loan contracts.
You have options, but it’s important not to rush into emergency loans without a solid financial plan. For more information and lifestyle tips, check our blog for updates.