When Personal Cash Loans Don't Make Sense

Personal cash loans are helpful in a financial emergency

, but they are not the best choice in every situation. While these loans can be quick and easy to apply for, they also tend to come with a higher interest rate than traditional lending products.

To avoid paying too much to get emergency funds, consider the alternatives before applying for a cash loan. There are some situations where these loans may not make sense for you.

You Have an Emergency Savings Fund

If you have saved money into an account for emergencies, this would be the obvious choice when you need cash in a hurry. While you will lose interest on the amount you withdraw, the rate will undoubtedly be much lower than you would find on personal cash loans.

If you must withdraw from your emergency savings, have a payment plan in mind so you can replace the funds in your account as quickly as possible. If you are concerned about the interest you will lose, calculate that amount into your balance and pay the total back in full.

You Have a Credit Card

Credit card holders who have not maxed out their credit limit can use this piece of plastic for emergencies. While the interest rate is high, it is often lower than what you would find on personal cash loans. To avoid exorbitant finance charges, pay off the balance as soon as possible. To ensure you have credit available for emergencies, try to avoid using your credit card in other situations.

If your card has run up a significant balance, you may not want to use this option when an emergency arises.

You Have Overdraft Protection

If the purpose of the cash loan is to avoid bounced check charges from your bank, consider your alternatives. Some people have overdraft protection attached to their account to cover checks when there is not a sufficient balance in the account. Overdraft protection is typically paid back in minimum monthly installments or in full, whenever you can afford to do so. This protection usually comes with a lower interest rate than personal cash loans, which makes it a more affordable option when it is available.

You Have Family to Help

Some people turn to family members when financial times get tight. In some cases, the money can be borrowed and paid back interest-free. If you have a family member who can help dig you out of your financial hole, this is a much more affordable option than personal cash loans. However, some people do not like going to family or friends for help because they don't want to disclose their financial situations. It may also put a strain on the relationship, particularly if the money can't be repaid according to the original agreement.

Finding emergency cash isn't easy, but there are some options available. If none of these alternatives listed above are possibilities for you, there is another solution. Personal cash loans issued by companies that specialize in emergency loans can be obtained quickly and easily, so you can get the money you need, right when you need it most.

by: Janet Gaither

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