Options for when you are in need of urgent cash- debts or your earned money?
Life has a way of throwing curveballs at us no matter how much we plan. Having unforeseen emergencies can be challenging, they can either drain you down physically and financially. This month you may be a little short on cash to cover the rent. Or your car broke down on your way to work. It is certainly nothing to be embarrassed about:
In such times of need, it is important not to rush yourself into making a choice and it is wise to take the time to understand the best and most manageable way for your specific financial situation.
Here are some quickest options in which money could be readily available:
1) Borrowing From Friends and Family
In olden days, when you meet with a financial emergency, the first ones that usually come into your mind are someone trusted in your circle, relatives or loved ones who are financially stable. However, in recent years with the financial repercussions of the Covid-19 pandemic, the purchasing power of most are served a great blow, which renders this option not within reach as your family and friends might be in a financially stretched positions themselves.
The benefits of this option though if it is available includes not having to submit application form and no approval period as you would with a lender- so chances are you will be able to get the money faster. You more likely wouldn’t be charged any interest or if any the interest rate could be well below what a lender/ credit card issuer would charge. There is also flexibility in when to repay the loan according to your ability and timing.
2) Leveraging on your Credit card
Credit cards have a cash advance feature which allows you to withdraw funds from the atm machine. Eg. If you are just days away from payday and your savings account is running low, you may opt for this quick loan in which you could draw up to your credit limit. The interest rates could range from 15-28% p.a. However, do bear in mind there could be applicable withdrawal fee and interest charges kick in right from Day 1 so it is advisable to avoid it unless it is absolutely necessary.
3) Personal Loan
These are unsecured loans offered by banks and a cheaper alternative to cash advance which could be one way for you to obtain some quick cash should a financial need arise. The loan tenure goes up to 5 years in most cases (HSBS offers up to 7 years), repayable in easy monthly instalments and the interest rates could range from 7-20% p.a. depending on your loan amount, tenor and the better your credit score, the better interest rate you will likely qualify for.
4) Payday loan
Unfortunately not all people have access to Option 2 and 3 as their income do not qualify which only left them with the expensive option of payday loan.
While there is no set definition of a payday loan, it is usually a short-term, high-cost loan– taking care of mid-month unexpected expenses that need to be settled right there and then or financial obligations that cannot wait till when your scheduled payday comes.
It typically comes with a fast approval within 1-2 days therefore a high admin fee of 10% and 48% p.a. interest rate (yes you read that right), due on your next payday. To these financially underserved group of people, this could set them in a highly disadvantageous situation, as to begin with they aren’t earning much and if they aren’t careful, the amount could balloon and land them in debt traps which they might have trouble repaying.
5) Gold loan
If you possess some gold assets or your grandma has left you some gold jewelleries, you could visit any of the pawnshops conveniently located islandwide. Get your items valued and quoted by the experts at the pawnshop in exchange for cash immediately after you have agreed to pawn. For instance, you could obtain a 85% loan-to-value chargeable at 1% interest per month with a maximum annual interest rate of up to 18% (which is based on the value, quality of gold and loan tenure).
6) Salary advancement scheme
Nowadays employers understand that employees have financial emergencies every now and then, all the more so in the aftermath of the pandemic. They typically do not charge interest for a staff benefit like this. However, adhoc pay advance processing takes at least couple of days to a week and it adds additional burden to HR functions. Sure it sounds like a reliable life buoy, but what if you have a bursting tap at 2am flooding your kitchen, is this going to provide that much needed help right there right then?
7) Earned Wage Access
Conventionally, salary is only received during payday. But in an ever-changing world where practically everything in our lives are on-demand, thankfully, with the advancement of payment technology- this need has been increasingly picked up by employers and reflected in their payroll system revolutionization. Earned Wage Access is an employee benefit which once you are enrolled could give you the flexibility of drawing a proportion of your earned salary tracked in real time- conveniently accessible 24/7 through an intuitive next-gen wage app.
The best part- it is neither a loan nor salary advancement hence no fret about incurring any interest or late charges. Each transaction only comes with a nominal flat fee. During payday you simply receive your balance salary nett of the amount being withdrawn. It’s that simple! Isn’t it a no brainer that in times of emergencies or when you are short of cash due to whatsoever reasons, the first option for you is to access your earned money instead of turning to credit?
If you think this makes a great instant cash solution to solve your day-to-day financial problems, click this link https://friyay.asia/contact-us and our friendly consultants would be happy to help you in your enquiries!
References
https://www.cbsnews.com/media/5-emergency-options-when-you-need-cash-now/ August 3, 2015
https://www.valuemax.com.sg/moneylending/loans/unsecured-personal-loans/payday-loans/