Even if you are doing well with managing your monthly income & spending, cash emergencies can still occur.
If you require money on an urgent basis and you do not have sufficient savings to use, then the emergency cash loans offered in New Zealand can be of great help to you.
Find out how to get the money which you need fast and how to avoid getting into further financial trouble.
Loans from Banks
The commercial banks in New Zealand should be the main lenders to turn into in case you need money. Many smaller lenders offer faster and easier approval, but they charge higher interest rates and fees. The repayment schedule may be more difficult to follow as well.
You should consider different types of emergency cash loans to choose the most suitable one for your needs.
If you already have a card, you can use it to withdraw the money that you need. There is a withdrawal fee charged, but you will get the needed cash instantly.
Home equity loans and credit lines
These credit products are fairly easily accessible to homeowners who have sufficient equity in their property. Since the house acts as security, the lender will set a lower interest rate due to the lower risk. The repayment will be more affordable, but in case of default, you may loose your home.
There are also known as signature loans as they do not require placing an asset as security. As long as you have sufficient income to repay the loan, the lender will grant it to you. The interest rate will be higher and the loan will be more expensive to repay since there is no security, but you will not risk losing a valuable asset of yours.
In case of a financial emergency, an unsecured loan may be the best solution. Its repayment may be somewhat more challenging due to the higher interest rate, but you will not have to worry about losing your home or another asset of value if your financial situation deteriorates. You should apply to a lender that will pay personal attention to your situation such as your bank or a credit union.
Help from Family & Friends
A family member or a friend will certainly show great understanding about your situation and may be able to help you out. You should definitely consider asking a close person for help. If the person agrees to lend you money, you should draw a loan agreement and sign it so that both of you can have peace of mind.
At the same time, you should not feel offended if the person cannot help you out with cash. They may not have the money or may worry that they will not be able to get out of a cash emergency themselves if it happens to them. What you need to do is to find an alternative. The peer to peer loans are available from private individuals who are often willing to show great flexibility while making cash easily available.
If there is no other way for you to get emergency cash, you may consider using one of the payday loans in New Zealand. These loans are among the most expensive and difficult to repay, but they may be your only option, especially if you have bad credit or small disposable income. If you take out such a loan, you must do everything to ensure that you will repay it timely and in full. If you extend the loan or get another one of the same type to repay it, you can end up in great debt.
The problem with payday loans is that they can get you into a vicious cycle of borrowing unless you are extra careful. They have very high interest rates and fees. Interest is charged daily and this makes them even more expensive. If you keep borrowing to repay the first loan, you will get into even more debt. In this situation, you may not be able to qualify for a less expensive loan from a bank. That is why you should use a payday loan only as one-off solution and ensure its repayment.
The title loans may be even more dangerous. With them, you pledge an asset of yours, usually your car, as security. The lender will give you the cash easily and quickly, but the loan may be quite expensive and the monthly instalments may be quite difficult to pay. If you default on the loan, you may lose your asset. If it is your car, you may not be able to travel to work and earn a salary.
Alternatives to Borrowing
While using emergency cash loans may seem to be a straightforward solution, there are alternatives which may be cheaper. It is possible to sell a valuable asset that you have such as a TV, a home theatre system, a fancy sofa or even your car. You will be able to use the money immediately after the sale.
You will no longer have your asset, but you will avoid the burden of paying interest. This can protect you from future financial trouble as the cost of a loan may be far higher than the cost of getting a replacement. This is particularly true for payday loans.
Follow this advice to use emergency cash loans in New Zealand effectively and safely.