If you need cash fast, what should you do? Should you use money in your savings, apply for a loan or pull funds from a credit card? Being prepared for emergencies reduces stress and anxiety if something unexpected occurs.
Having an emergency fund can help eliminate the need to worry when cash is needed. The rainy day, or emergency fund, is money set aside to take care of unexpected expenses as they occur. It should contain three-to-six months worth of living expenses. These accounts allow immediate access and if possible, still provide a decent rate of return. If cash gets used from the account, it is essential to replenish the funds.
Another option is to consider a salary advance loan (SALO). A SALO can be obtained for up to $500, which is repaid at the time of your next paycheck.
You may also apply for a personal loan, which can be open- or closed-end. The closed-end loan is for a set term; the open-end loan is not. The open-end loan can also be used for future borrowing.
Try to avoid cash advances from credit cards unless there is no penalty. When a cash advance is taken from a credit card, the interest starts immediately. That interest is usually at a higher rate than your purchase rate. If you decide to go with this option, it is essential you pay your balance off as soon as possible. Keep in mind, the cash advance balance, as it carries a higher rate, will be delegated as the last part of your account balance to which payments will be applied. Please note that LGFCU Visa Credit Cards have the same rate for purchases and cash advances.
Delve further into topics of interest in our Learn section and find ways to get started on your action plan in the Act section.
