Borrowing money can be an easy way of getting emergency cash, but in the end, you have to pay that money back, often with interest added on top. Not everyone can afford to take out a loan and other people may be rejected if their credit score is too low. Fortunately, there are other funding options out there for when your money – here are just a few options.
The most obvious way of funding something without a loan is to save up – but of course, this isn’t very useful in an emergency. Saving up for something takes a long time but it can be more satisfying in the long run. There are savings accounts that can allow you to save up faster but allowing your funds to collect interest. Good times to save up could involve affording a holiday, affording a new car or starting a small business.
Sell/pawn possessions you don’t need
Many of us have valuable possessions lying around in our homes that we don’t need. Selling these items could provide you with the funds you need. You can sell your items online on sites like eBay or Gumtree, or you can sell them at a local store or auction. You can also choose to pawn items – a pawn shop will pay you the value of the item which you can pay back in order to get the item back or you can simply sacrifice the item. This could allow you to get money out of items that you don’t necessarily want to sell but could still be of value.
Take money out your retirement fund
It’s possible to access your retirement pot early in many cases. This could allow you to borrow some extra cash for your needs, however, it could give you less money to live on when you do eventually retire. If you’ve got a good pension plan set up that will more than allow you to live comfortably when you get older, you may be able to justify dipping into it, however, it may not be advisable if you haven’t got much of a pension set up.
Opt for an equity release
If you own a property that you’ve had for a good few years, you could consider opting for an equity release. This allows you to gain access to any added value that the property may have accumulated over the years. This does mean that you won’t get as much when you sell your property, however, if you don’t plan on selling up this may not matter much to you. You can find out more about equity releases here at Sun Life.
Make a legal claim
In some circumstances, it may also be possible to seek legal compensation. Personal injury lawyers such as Lichtenstein Law Group PLC4 could come in useful if you need to pay for medical bills for an injury that wasn’t your fault – such lawyers could help to try and win money off the person or company that harmed you. Legal claims can be a lengthy process so it may not be the best form of funding in an emergency.
Borrow from friends/family
Whilst this is technically a form of loan, borrowing from friends and family could allow you more time to pay off the loan rather than having to set up monthly payments. You’re also unlikely to have to pay interest. Of course, borrowing from friends and family can put a strain on these relationships and you should be certain that you can pay these debts back.