Financial Directory

When You Need Cash Fast

There are times when you may need funds in a hurry.  No matter how urgent the situation, study the borrowing options to make sure that you are getting the best deal in terms of interest and payments.  Unless you are careful, it is another way for you to slip into debt.

• Credit Cards:  Interest rates on cash advances are 20 percent or more.  Shop around for the lowest credit card rate you can find and read the fine prints.

• Retirement Funds:  If you are participating in a 401(k), you can usually get automatic access to these funds if you contributed after-tax money.  The default penalties can be significant.

• IRA:  A regular IRA can also work as a short-term emergency fund as long as you pay back the loan within 60 days.  If you don’t, you will be penalized with tax and default penalties.

• Stocks:  If you own stocks, you may be able to borrow an amount equal to and up to 50 percent of their value.  Consult with your stockbroker to investigate this option.

• Life Insurance:  If you have whole-life insurance, you may be able to borrow a certain amount of money at a low interest rate based on the length of time that you have your policies.  Your insurance agent will be able to help you with this plan.

• Home Equity Line of Credit:  A fixed-rate home-equity loan may carry a lower interest rate than a credit card and often the interest is tax-deductible.  A home equity line of credit is secured by your home.  If you don’t make the payments, your mortgage lender could foreclose on your home.

• Personal Loan:  If you have a solid job and a solid credit score, talk to your bank or credit union about taking out a signature loan.