Would you have a hard time coming up with $100 on short notice? If so, you’re not alone.
Many Australians admit coughing up $100 to pay a speeding fine, medical bill or other unexpected expense at the drop of a hat would be a challenge. There there are many quick but sometimes costly or dubious, ways of getting money in a hurry. And then there are better ways to obtain cash fast.
Best alternatives to making $100 fast
1. Peer-to-peer lending: this method connects borrowers to regular people who loan their money in order to earn interest on it. Websites such as SocietyOne and RateSetter enable your loan to be funded by individual investors. The interest rate is decided based on how much risk the lender is willing to accept – they also manage the paperwork and payments.
2. Credit union loans: when you’ve fallen on hard times, you can opt for a short-term loan from a credit union to help you get through. The good thing about this option is that even people with poor credit can still be considered. The benefit is that because they are member-owned, the rates offered by individual credit unions are lower than those the banks offer.
3. Small dollar loans: some community organisations are able to offer small loans of around $300 to $1200 through the Government’s No Interest Loan Scheme. This zero-interest option lets you make repayments over 12 to 18 months.
4. Ideally, have an emergency fund: ultimately, the most important thing you can do is set up an emergency fund for those unexpected expenses that inevitably pop up. If you have to start a fund from scratch, do so by starting a budget and putting a little money aside each week.
Worst ways to obtain money in an emergency
1. Payday loans: they might offer easy money fast but with extremely high interest rates and fees, payday loans are a fast track to financial trouble. They’re really the last place you want to turn, especially if you rely on an income that varies week to week. You only need to miss one payment to get yourself into hot water.
2. Debt settlement: like payday loans, debt settlement is best avoided. While for some people this method can work out, financial experts still consider it a risky option because it usually involves fees and strict, watertight contracts – if you miss a payment, you stand to lose your money, with none of it going towards paying off your debt.
3. High-interest credit cards: a slightly less predatory option is to get a high-interest credit card, which simply depends on you paying off the card on time. However, missing one payment can leave you having to pay fees plus interest. The good news is some credit card companies will help you obtain a lower monthly minimum so that you can avoid late payment fees.
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