What to do when you need a small cash loan

Like many other people you have undoubtedly found yourself needing only a little cash for a short period of time to cover an emergency and have no money in your savings account. Due to the higher average cost of living now a days and reduced incomes it is very hard to get far enough ahead to have enough money in your bank account to cover short terms problems. And of course problems always occur at the worst possible time.

So what do you do if your car broke down and you need $500 to cover the repairs? Unfortunately for small amounts of money to be lent for a short period of time your options are fairly limited. The first place to look may well be to your family and relatives. This can be very awkward but having a plan that includes a firm repayment schedule may make things easier. Be sure to consider the person’s current situation before asking them for a loan. Being family you may know who can and can not afford to lend you money right now. If you have borrowed money before and repaid it in a timely fashion then you may know who is more likely to lend you money.

If family isn’t an option for you than you may wish to consider approaching your bank next. Banks no longer offer loans for small amounts of money as the profits do not out weight the costs and hassles of setting up and collecting the debt but they do offer other services that may be of benefit to you. You should consider asking for an over draft on your account, a line of credit, a credit card or perhaps even a small personal loan. Of course these options and the amounts available to you are all dependent upon your credit rating. You may be able to get $1,000 or more or you may only be able to get $100.

If you bank is unable to work with you then you will have to consider a third party solution. A third party lender may be a credit union or a finance company. There are many national third party lenders that are in business to help people who banks can not help. Most third party lenders are willing to over look credit problems that banks will not in exchange for a higher interest rate. This makes their loans a lot easier to get but may cost you more money than they are worth. Also most companies do not lend anything less than about $1000. If you only need $500 then it would be in your best interest to apply all of the unused balance to your loan. Do everything in your power to resist the urge to use the extra money for anything than repaying your loan.

The only other option that you may have for a short-term loan would be a payday loan company. While these lenders will be able to help you with your short-term problem the cost of doing so is extremely high. Pay day loans are structured to make a lot of money for the company offering the loan and thus are considered predatory lending and are definitely your worst option. If you are forced to use a payday loan company make sure you repay the loan as fast as you can and do not roll the loan for any reason.

Finding yourself needing only a few hundred dollars for a short period of time is a tough situation to be in. You must very carefully consider your options before deciding on a course of action as most of your options will come with fairly high interest rates attached thus making the option less economically viable and perhaps too expensive to be worth it. Shop around for your lending solution and be sure not to settle for the first option that you find until you are absolutely sure that it is the best option for you.