Various reputable lenders offer emergency cash loans in Australia, with same-day approval and access to cash within hours.
Even with the most effectively prepared budget and excellent personal finance management, you are never fully protected from unexpected expenses which seem to come out of nowhere. This is a fast and efficient solution.
It is the primary alternative to the use of an emergency fund if you do not have one. Get valuable information and advice which will help you to deal with any financial emergency easily, quickly and effectively.
Your safest bet is to take out a loan from one of the banks in Australia. While smaller finance companies may offer easier and quicker credit solutions, the speed and easy accessibility typically come at a higher price. You may face a very high interest rate or a budget challenging repayment structure and this can get you into even more trouble.
Emergency solutions offered by banks in Australia
1. Credit cards
This is one of the fastest options to use as you simply need to go to the nearest ATM and withdraw the money which you need. Just keep in mind that typically there is a withdrawal fee. Additionally, in some cases interest is charged from the time of withdrawal.
2. Home equity loans and credit lines
These credit facilities may take a little bit of time to obtain, but they are usually easily accessible to homeowners with sufficient equity in their property. They come with lower interest rates since they are secured against the property. This makes the repayment easier, but you have to keep in mind that in case you fail to meet your obligations, the lender will have the right to take over the asset used as security.
3. Unsecured loans
These are among the most widely used loans for financial emergencies. They require no security so there is very low risk for you. As long as you earn sufficient income to pay back what you will owe, you can get approved. Since the risk is passed onto the lender, the interest rate will be higher so you have to ensure that the loan will be affordable for you.
You will find an unsecured loan to be a highly effective solution in case of an emergency. While the cost of borrowing may be higher, you will not risk losing a valuable asset in case you get into further financial trouble. You can readily find a micro lender offering competitive interest rates and paying personal attention to the needs of loan applicants in addition to assessing income and credit report data.
Loans from Family & friends
You should certainly consider turning to family members and friends in a cash emergency. They may be able to help more quickly than a lender and borrowing will most certainly be a lot cheaper as well. When you borrow money from a family member or a friend, both parties should sign an agreement so that their interests are effectively protected.
If the people who are close to you are not able to help, you should not get upset. After all, they may be going through financial hardship as well or be at higher risk of cash troubles.
One alternative is P2P lending
P2P lending platforms are readily available in Australia. They enable you to take out a loan from a private person. A private person may show greater flexibility than a lender and give you more favourable repayment terms and conditions.
Check out the "1 Hour loan" – Payday loan
If you cannot borrow money in any other way, you can check out the payday loans in Australia.
These are among the most expensive and riskiest emergency cash loan options, but if you have bad credit or limited disposable income, they may be the only solutions available to you. When you take out such a loan, you must accommodate its repayment in your budget for the next month so that there are no nasty surprises on your next pay day. If you extend the loan or take out another one to pay it back, you may get into a debt trap which can be hard to get out of.
Why are payday loans considered to be so risky?
They have a very high APR due to a high interest rate and high fees. Even though the authorities in Australia have capped the charges on such loans, they are still among the most expensive.
Additionally, interest is charged on a daily basis rather than on a weekly, monthly or annual basis and this adds considerably to the cost of borrowing. These loans are useful one-off solutions for cash emergencies, but they must be repaid quickly and in full, even if this comes at the price of considerable monthly budget restrictions. That way, more serious trouble will be avoided.
Title loans are just as risky as Payday loans
Some experts consider them to be even more dangerous. You will need to use an asset to secure the loan. This is typically a car or another motor vehicle. The lender will provide the cash quickly and without hassle. However, you can expect the loan to be expensive and to have a challenging repayment structure. This puts you at higher risk of losing the asset which you have placed as security and the implications can be very serious.
If you lose your car, for example, you may not be able to travel to your work place and earn employment income.
There are other solutions in addition to emergency cash loans which you may be able to use.
If you do not have an emergency fund, you can consider selling one or more assets in order to get the money which you need. The list of assets which you can sell fairly easily includes electronic devices such as smartphones and TV sets, luxury accessories and home decor pieces, and vehicles including cars, boats, bikes and motorbikes.
The proceeds from the sale will be at your disposal to use as you deem fit. You will deprive yourself from an asset, but you will not have to incur extra costs in the form of interest for months or years. Generally, the total cost of borrowing may be far greater than the value of the asset which you will sell, especially if you use a payday loan. That is why asset sale can be the more cost-efficient and less risky option.
Compare your options carefully in advance so that you will know which one of the emergency cash loans to use if the need arises.