How to Borrow Money Quickly: 7 Options, Costs and Risks

An emergency bill can make a fast loan seem most beneficial. While a loan needs to be quick, there are other important factors to consider, like how much money you get, when you’ll have to start paying it back, and how much the debt will cost you when it’s all said and done. A fast decision does not mean that your loan is guaranteed or that the money will be available immediately. The other factors that also need to be considered are the lender, the process of confirming your information, your bank, and the time of your application.

Identify the lowest amount that will take care of the immediate need. If looking at borrowing, weigh the pros and cons of new debt against payment plans, changing your due date, or seeking local assistance. The goal is to avoid large debt and take care of the financial shortfall. Look for ways to close shortfalls without causing larger shortfalls that will be due on payday.

Key takeaways

• Before you borrow, check if the creditor can grant any of the following: an extension, a hardship plan, or a waiver for certain fees.
• Examine the APR, fees, cash you actually receive, payment dates, and the total you repay. Speed should never be the sole deciding factor.
• Buy the product that meets your needs. For example, buy now, pay later (BNPL) schemes pay for your purchase, but do not provide cash for your needs.
• Never accept a payment that would leave you with insufficient funds for rent, food, utilities, and other essentials.
• Pay attention to guaranteed approval, acting quickly, or an upfront payment before funding.

Before looking for a fast loan

Record the specific bill, amount, and actual due date, and outline the consequence for late payments. A utility company, landlord, doctor, or other creditor may allow a payment plan or extension of a due date. Also, community programs may assist with your food, housing, utilities, or transportation. However, it may take time for them to respond, and you may not qualify. Borrow only if you have to cover the remaining gap, if one exists.

Next, compare the repayment to a typical pay period. From the income you anticipate receiving before the loan payment is due, deduct housing, food, and transportation expenses, along with other essentials, such as insurance and your minimum payment toward any debts. Overtime, tax refunds, and other forms of income should not be included in this calculation. Do not assume you will have this money. If you cannot afford the loan without another cash advance, this loan is not affordable, regardless of the lender’s approval.

Once the threat from the immediate concern has passed and the problem is starting to be addressed, even a thin buffer against cash shortages will help reduce the future dependence on expensive credit. An emergency savings plan should be built to account for your actual income and essential spending, probable setbacks, and should not be built to a one-size-fits-all target.

Seven ways to access money quickly

This comparison refers to common structures and should not be interpreted as an indication of eligibility, cost, or the time funding may be available. Providers are in charge of all terms, and they can be governed by certain state laws on what products they may offer.

1. Personal loans

A personal loan is typically given to an individual as a lump sum to be paid back through periodic payments. The term “installment loan” refers to the payment schedule; it doesn’t signify a purpose. A personal loan, auto loan, and many other types of loans can all be classified as installment loans. An unsecured personal loan does not require collateral, but a secured personal loan runs the risk of losing the pledged collateral if the loan is defaulted on.

The terms of a personal loan depend on a number of factors, including the lender’s criteria, the lending amount, credit scores, and the underwriting process. You should check the APR, the cash you receive after origination fees, the payment amount and term, the total amount paid, the consequences of late payments, and the prepayment terms. A longer-term personal loan will often mean a lower monthly payment, but a larger total interest payment.

2. Credit-union small-dollar loans and PALs

Banks and credit unions may offer small-dollar loans with installment payments. Some federal credit unions also offer Payday Alternative Loans, or PALs. These are regulated products, but they are not available at every credit union, and approval is not automatic.

Per National Credit Union Administration guidelines, PALs I and PALs II each have different rules regarding amount, membership, and term. Both must fully amortize and cannot be rolled over. Ask a credit union which product it offers, when a new member may apply, what the application fee is, and how quickly it can conduct its review.

3. Credit-card cash advances

Eligible cardholders can access their credit line through a cash advance. This line is subject to a cash advance limit. Cash advances are easy to use but come at an additional cost. The Consumer Financial Protection Bureau states that a cash advance can have a flat fee, a percentage fee, an additional fee for using an ATM, and interest starts as soon as the cash is withdrawn. Interest can start even before a grace period has passed.

Check your statement or card agreement for the cash advance APR and the cash advance limit. Calculate the cost until you can pay it back in full, not just the cost of the minimum payment. The phrase “cash advance” is also used for payday loans and paycheck advance products, so don’t trust the label; be sure to check the contract to see how you are expected to pay it back.

4. Earned wage access

Earned wage access or a paycheck advance may let a worker receive part of earned or estimated wages before payday. Employer-partnered and direct-to-consumer products work differently. Some offer a free transfer, while others charge for expedited delivery, a subscription, or a transaction and may request a tip.

From a CFPB study of the market, we know that frequent use and/or fees foster a high annualized cost. Consider express-transfer fees and tips as costs. Also, evaluate the mechanism of repayment and how much the employee will receive in their next paycheck; multiple pay advances will move the same gap to a later date, but will not solve it.

5. Buy now, pay later

Buy now, pay later, or BNPL, allows you to finance qualifying purchases rather than paying in full at the time of purchase. BNPL does not provide cash to meet a future expense, such as a bill. Some payment plans charge zero interest if payments are made on time. However, terms may vary, and longer plans may also charge interest.

Prior to agreeing to anything, consider all present-day plans and the date of their associated automatic payments. The CFPB observes that there might be late payment penalties, and an automatic debit may cause an overdraft or an insufficient funds charge due to a low account balance. Tracking returns and disputes over billing can be difficult to resolve when the merchant and the lender manage different segments of the transaction.

6. A loan from family or friends

Family and friends lending smaller amounts of money may not include lender fees and formal underwriting. However, it may come at the cost of damaging a relationship. It’s necessary to have a discussion if income is delayed or something in the situation changes. For larger amounts that can be considered a loan, it may be advisable to contact a tax attorney or legal counsel, as there may be interest and other conditions that are required to be included when reporting the loan.

Put the amount, payment dates, interest (if any), and late-payment plan in writing. Both parties should maintain a copy. A realistic agreement is always better than a vague promise to repay “soon” and is more likely to keep the relationship intact. A lender should not provide money that they cannot afford to lose.

7. Payday loans

A payday loan is generally a small loan due in a single payment on or near the borrower’s next payday. Availability, limits, and fees depend on state law. The CFPB gives a common illustration: a $15 fee per $100 borrowed on a two-week loan is equivalent to an APR of almost 400%. That is an example, not a universal price; the contract and local law control the actual cost.

Before you sign, read the amount due, payment authorization, rollover terms, and extended-payment terms. Understand that paying a rollover fee may extend your due date and does not reduce the principal amount. Review the CFPB explanation on the cost of payday loans. The CFPB also recommends that payday borrowers should contact the state financial regulatory agency to determine whether the payday lender is licensed and what regulations of the state would apply to the payday loan transactions.

Costs to compare on every offer

APR combines interest plus some finance charges into an annualized measure, which is definitely useful, but it is not the only number that will impact your budget. When possible, compare the same loan amount and the same repayment period. A cost-of-credit analysis should include:

• Net proceeds: the amount you actually receive after any fee withheld from the loan.
• Finance charge and APR: the disclosed dollar cost and annualized rate.
• Payment schedule: each amount and due date, including the first payment.
• Total of payments: the total amount paid if the agreement is followed as written.
• Late or failed-payment costs: fees, default interest, collection activity, and possible credit reporting.
• Collateral: any vehicle, deposit, or other property that could be lost after default.

Automatic payments can reduce missed due dates, but they require enough money in the account. Keep the authorization, monitor the withdrawal date, and understand how to change or cancel it. If the lender’s numbers do not reconcile or the terms are unclear, pause and ask for written clarification.

Credit labels do not answer the affordability question

Having a low credit score may limit your options or increase the price you have to pay, but it’s important to know that “bad credit loan” is not a regular loan type. The no-credit-check sign may also indicate that there is no standard hard inquiry at one stage. The provider can check your identity, your income, your bank transactions, and other things, and can also check your credit later. Neither sign guarantees that you will be approved, that the price will be low, or that there will be no effect on your credit. Before submitting sensitive information, be sure to read the provider’s inquiry and reporting disclosures.

Protect your information and avoid fast-loan scams

Some Scammers use the pressure of urgency. Check the lender’s legal name, physical address, contact number(if provided), and any necessary licensing for your state. Visit the company’s or regulator’s website; don’t use any link from bluff unsolicited texts or emails.

• Don’t pay to have loan funds released by gift card, cryptocurrency, or wire transfer.
• Don’t ever give your bank password or one-time codes.
• Always question the need for Social Security, payroll, or bank information and ask how it will be used or shared.
• Get out of there if someone s guarantees approval or says you have to pay for the loan to be funded.

The FTC says that advance-fee scammers might assert that they provide credit offers no matter the history and then charge a fee for processing, insurance, or paperwork. No legitimate application or appraisal fee ensures approval. Fraud should be reported to the FTC. If account information was given, your bank should be contacted immediately.

Bottom line

If you need to pick an option that arrives the earliest, only covers the gap that is necessary, and can be repaid without using money from your essentials or borrowing, then you should start with the bill. Compare the written terms and treat speed as one of the factors in the decision.