- March 17, 2017
- Posted by: Alyssa Plumb
- Category: Blog
Need emergency cash? Personal loan vs credit cards
It is recommended that people have 3 to 6 months’ worth of income saved for emergencies; however, most people can’t even afford to pay $400 for unexpected costs. Many Americans struggle to get this type of cash saved though. It is really hard to find that kind of extra money in your budget on a regular basis. People usually have to choose between getting a personal loan or using credit card debt when they need fast cash, whether it is a couple hundred dollars or a couple thousand. Here is how you can decide what to do for emergency cash.
How fast do you want to pay it?
If you can pay off your cash immediately, a credit card is ideal because you can essentially borrow money for free as long as you pay it off every month. There’s no interest charged unless you carry a balance over a month. If you plan to pay it off quickly, a month or two of interest isn’t a huge deal either.
However, if you are going to pay for something bigger that costs a couple thousand dollars, you might need more time to pay it off. In those instances, a personal loan will work better. The credit card interest is higher than personal loan interest, so large emergency cash purchases that will need to get paid over a couple of years will be much better off on a personal loan.
If you need emergency cash now, you can go online and apply for a loan and have it deposited into your bank account as early as the next business day. Getting a personal loan is as easy as filling out an online application and waiting for approval.