Few people escape the need to get their hands on some fast cash from time to time. Let’s say for example that you have an accident in your car and you have to come up with R3000 for the excess payment. If at all possible you want to avoid interest charges, so you could consider asking a trusted friend or family member for a short-term loan. The best way to pay it back is in affordable installments. You could also ask your employer, if you have a good relationship with them they will probably help you.
If this fails look at what liquid investments you have. Cashing in a fixed deposit may work. Before you do this check with the bank what penalty you will pay. You could also consider cashing in some unit trusts although it’s never ideal to use long term savings for short term cash crunches.
Have a look around your home for things you can sell on sites like Junk mail, Gumtree, OLX or Bid or Buy. You may have a treasure trove of goods that you can sell.
If you have no liquid investments the next place to look may be your bond but make sure you pay the bond account back over a sort time.
If you do not have a home loan then you could approach your bank for an overdraft or a personal loan. If you have a budget facility on your credit card you could use this but it can be an expensive option.
A place you should never look to for a short-term loan is an unregulated micro lender; the interest rates charged will put you in the poor house, it is simply not an option. There are currently a lot of scams doing the rounds offering you 3% interest on loans. These are not legitimate lenders. They will ask you for an admin fee and you’ll never hear from them again. If none of these suggested avenues are open to you may have to resort to juggling a few creditors. Call up the people you owe money to and explain the situation. If you are up front you can buy some extra time and delay some payments.
It is important to stop and think about the loan you are seeking; if it’s a genuine emergency then it’s ok to be looking for funding but if the emergency comes in the form of new shoes for a hot date-don’t do it!
Payday loans may be an option, they offer a quick fix and can tide you over when you are in a fix. They don’t come cheap but when you are out of options they can be a life saver.
And finally prevention is better than cure, try and put some money aside every month for an emergency fund. To start the fund you can cut down on entertainment, scrutinise your impulse buys, monitor your cell phone calls, or to really save big bucks how about giving up smoking. 3 to 6 months salary in a separate bank account can buy you enormous peace of mind, it is worth a few sacrifices.