4 Ways To Get Emergency Cash Even With Bad Credit
When you have a good credit score, getting a loan or a credit card is easy because banks and lenders perceive you as a lower risk. But what can a person with bad credit, no savings and no credit cards do for money in a crunch? Approximately 1.4 million Americans fall within the lowest FICO range from 300 to 549, and millions more fall within the poor to fair range of 600 to 699. With these scores, it is difficult, if not downright impossible, to get a traditional loan. If your score is less than stellar, take heart. You can still get extra cash in an emergency using these tips.
Get a Home Equity Line of Credit
If you have equity in your home and a stable income with a positive payment history during the past couple of years, you may qualify for a home equity line of credit (HELOC). Your credit score doesn't have to be perfect as long as it is fair and your credit history demonstrates recent financial responsibility. The benefits of getting a line of credit instead of a lump sum loan are that you can borrow only as much as you need, and the line of credit stays open as long as payments are made on time.
Bear in mind that your HELOC will have a higher interest rate because of your poor credit score. It also puts your house in jeopardy if you're unable to make the payments on your loan.
Ask for a Mortgage Forbearance or Deferment
If you need cash to cover a temporary emergency, such as an unexpected medical expense or car repairs, your monthly mortgage payment may be all you need. Don't skip the bill without notifying your lender, though, because this can result in a negative report to the credit bureaus as well as late fees. Call your lender to ask about a temporary forbearance or deferment of your payment. You may be eligible for a payment reduction or temporary suspension of payments to help you get back on your feet. This amount may be paid later by adding extra to your monthly payments or by tacking the payment to the end of your mortgage.
Request a Student Loan Forbearance or Deferment
Millions of Americans have student loans, and when money's tight, they can be a real burden. Fortunately, student loans from the government allow for forbearance or deferment during financial hardship, illness or unemployment for up to three years. It's not difficult to get your payment suspended for a few months, but you may have to provide proof of financial hardship in the form of paycheck stubs or bank statements. The lender does not look at your credit rating in determining whether or not to grant the deferment or forbearance.
As soon as you're able to resume payments, do so. This is especially important in the case of a forbearance because the interest continues to accumulate even though your regular payments are suspended. If you need more time, remember to renew your forbearance or deferment when the time is up to avoid further damage to your credit.
Get a Payday Advance
For those who do not have a mortgage or student loans, you may not have any cash to free up from your monthly bills. In fact, not paying your rent or skipping a utility bill can be incredibly risky. In that case, you may want to consider a payday advance from places like http://www.EZcheckcashadvance.com. This is a convenient solution, particularly if you only need a few hundred dollars or less in a pinch. To qualify, you'll need a checking account, proof of income and a valid photo ID. It is important that you have the funds in your checking account to pay the loan when it's due. If you do not, you'll incur additional fees with the lender and rack up overdraft fees with your bank.
Any of these options can help you get or free up hundreds to thousands of dollars to use in case of an emergency. In order to prevent short-term money shortages in the future, work toward building a savings account. You should also work on improving your credit score to qualify for traditional loans and credit cards if needed for emergencies in the future.