Is There Any Ideal Way To Get Money In An Emergency?

Tue, Aug 14, 2018

Featured Post, Financial Advice

Financial Emergencies can not only be draining on your bank account, but they can also drain you. With stress, worry and sheer exhaustion all going hand in hand with finding a source of money right when you need it most, you can feel lost and alone, but luckily there are an increasing number of ways to get hold of the cash you need, when you need it. However, with interest rates, eligibility criteria and hindsight all mocking you as you search, is there really an ideal way to get hold of money in an emergency? We’re exploring here.

Same Day Loans

Perhaps more commonly known as payday loans same day loans are one way to get the money you need when you need it, but with negative connotation having built up over the years, is this really an ideal choice? With rumours of excessively high interest rates and exploitation by lenders, fewer and fewer people are willing to risk it. However, FCA regulation and a sensible head can make this a viable option for most.

The Financial Conduct Authority (FCA) regulates companies that offer financial services across the UK, and same day loans companies are no exception. The introduction of a cap has meant that no consumer will ever pay more than double their original loan amount, and ensures that all lenders must conduct affordability checks on every customer. While a same day or payday loan may not be an “ideal” choice in some respects, they’re certainly getting better with regulation and may be for those awaiting their next pay day.

Budgeting Loans

Budgeting loans are the UK government’s way of offering financial help to those on income support but are still struggling. These loans are designed for bigger purchases that traditional living costs might not be able to cover, including furniture and household appliances, clothing, advance rent, maintenance and home improvements, travelling within the UK, new job costs, maternity costs, funeral costs and repaying loans that were taken out for the above reasons. You can get a minimum of £100, and up to £348 if you’re single, £464 if you have a partner and up to £812 if you’re claiming Child Benefit.

It’s important to note, however, that everything from your ability to pay the loan back, to the amount of savings you have or existing loans can affect how much you’ll get. These loans are interest-free, so you’ll only ever pay back what you took out in the first, but are taken directly from your benefits on a weekly or fortnightly basis.

Credit Cards

Credit cards are another way to get cash when you need it, but they do rely on eligibility and can often come with high interest rates dependant on your credit score. If you have a good credit score but find yourself in a sticky spot, a credit card could be a great way to get hold of the cash you need and in some cases, you may even get an interest-free period to take advantage of. Repayments on credit cards can often be small, manageable chunks, but you have to make sure that you’re paying off at least the minimum amount every month to avoid growing costs.

Emergency Fund

If you truly need an ‘ideal’ method for an emergency, your own, saved up emergency fund is exactly that. By saving up money over time, you can better be prepared when an emergency comes around – but is this foolproof? When saving up an emergency fund, you never know what emergency is going to come and when. You could’ve been saving up for five years, or five minutes when the next emergency comes around, and even after saving for a long period of time, one emergency could demand a much higher monetary amount than another. You won’t owe money to anyone with an emergency fund, but it’s important to remember that it is by no means free of risks.

Determining which method you use in a financial emergency will ultimately come down to the emergency in question and whether or not you could afford to cover the costs through your own emergency fund. While same day loans offer quick access to funds, they also have a higher cost associated with them, while budgeting loans are much smaller but arguably more manageable. Which would you try?

 

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