6 ways to come up with quick cash
By Erica Sandberg
October 8, 2015
Which is more terrible on my credit, a payday loan or a cash advance? I am short on rent this month and am feeling desperate because I don't want to be evicted. I need an extra $460 pretty much this minute. I'm between a rock and a hard place. Please help!! — Victoria
Please try to calm down. You're going to be OK. It's time to start brainstorming your way out of this temporary trouble.
Here is a list of options, along with their basic benefits and drawbacks:
- Payday loan. If you're working, it is possible to borrow against an upcoming paycheck. In most cases, these short-term loans don't show up on a credit report unless the debt goes bad. However, the price is prohibitive. The fee for a $500 advance will typically be around $50, which is tacked on to the amount you borrowed. If you can't repay the entire sum in two weeks, that fee will be added again. The only way I'd give this the nod is if you know for sure that you will repay the loan from that first paycheck.
- Credit card advance. Extract cash from a credit card account and it will show up on your credit report, but only in the form of a larger balance. There will be no indication that you withdrew money versus having paid for a product or service. However, there will be an origination fee of between 2 to 4 percent of the advance, and interest begins to accrue on that portion immediately — and often at a higher rate than for purchases. That makes this option rather expensive, though less so than a payday loan. The only damage to a credit score would be increased credit utilization, but if you pay it down in a couple of months, you'll be fine.
- Negotiate with the landlord. If you've been in your home for many years and have been a responsible tenant (or live in an area where it's difficult to secure great tenants), you may want to connect with the landlord and explain your situation. Ask for a break on the rent, with the $460 difference payable over time. It's far better than simply not paying or sending your rent in late. Follow through, though, as you probably won't get a second chance.
- Shuffle bills. Review your budget. Is there anything you can delay or reduce in lieu of getting your rent in on time and in full? For example, you may want to cancel a gym membership, get rid of cable, or slash your grocery bill to the bare minimum. Consider anything that will provide you with enough cash to cover the rent. You will have to accept some hardship, but you won't be adding to your debt.
- Sell what you can spare. I bet you own some things that you can sell in the next day or two, and the proceeds from selling these belongings may raise much more than what you need for your rent. Unnecessary bicycles, laptops, furniture, clothes, exercise and sports equipment — look around the interior and exterior of your home and identify valuables you can live without. Sell them via yard sales, person-to-person sales apps, eBay, Craigslist — even pawnshops. Apply the revenue to the outstanding rent and move forward. The only downside is you won't have those things anymore — though you may be able to get them again when you're in a better financial position.
- Borrow from a friend or relative. When approached and executed in just the right way, a personal loan can help tremendously. It will be free of finance fees (usually) and not subject to credit reporting damage. You'll be able to meet your rent. Of utmost importance, of course, is that you repay as promised. Don't and you'll forfeit something more vital than any credit rating: a relationship with someone you care about. If you go in this direction, form a contract and honor it.
These are triage methods, and while each can stem the bleeding, what you may need afterward is a real focus on improving your financial health. Remember this feeling of desperation and use it to make real changes. Reduce expenses, increase income — or do both. Start a savings account and add to it regularly. You can be victorious — it's embedded in your very name.
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