When You Need Quick Cash, Run Away From These Red Flags as Fast as You Can
- A shady lender might not tell you about application and prepayment fees, and might rush you to hurry up and sign on the dotted line.
- Payday loans come with punishingly high interest rates that could send you into a debt cycle.
- If you need cash in a hurry, consider payday alternative loans, cash advance apps, or borrowing from friends or family.
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Financial emergencies can strike fast and without warning. If you’ve got an urgent bill to pay ASAP and you don’t have an emergency fund, you might need to find a fast loan. But not all quick cash options are created equal.
Here are a few red flags to watch out for if you need money fast—plus a few options for getting quick cash.
Lender Red Flags
If a lender throws up any of these warning signs, it’s best to steer clear.
No credit check
If a lender foregoes checking your credit history in the loan process, basing approval on your income and employment status, they’re taking on more risk. As a result, the interest rates and fees on no-credit-check loans are likely to be higher than ones requiring a credit check. This could make it a lot harder to repay the loan.
If you’ve struggled with your credit, you might worry that a no-credit-check loan is your only option. But don’t worry—there are loan options even if you have bad credit.
Hidden fees
When you’re researching loan options, it’s important to get the whole story on a given loan. That includes all the fees you’ll pay. Comparing fees charged by different lenders is a great way to choose the right one for you.
A shady lender might not tell you about loan application fees, origination fees, or prepayment penalties. But all this information should be available to you upfront—if it’s not, run.
Understand what you’re looking at, or ask someone to review the details with you. For example, a shady lender might say that the interest rate is only 25%, which seems great when compared with the 36% you’d pay to take a cash advance on your credit card. But if that loan actually charges 25% per week, that equates to an annual rate of 300%.
Rushing your decision
Borrowing money is a significant event in your financial life. When you take out a loan, you’re committing to repay the lender, which could mean adding a payment to your monthly budget for years to come. A shady lender might pressure you to hurry up and sign on the dotted line, while a trustworthy one will let you take your time, ask questions, and do your research first.
Punishing payment terms
If the repayment terms you’re offered are going to be a strain on your budget, that’s a loan to pass up. A trustworthy lender will offer you repayment terms that work with your finances, and you might get to choose how many months/years you get to make those payments.
Quick Cash Loans to Avoid: Payday Loans
There’s one type of loan you should avoid at all costs—a payday loan. On paper, these loans sound pretty good—there’s no credit check; you can borrow a few hundred dollars; you get the money fast; and you repay it on your next payday (hence the name payday loan).
But payday loans almost always come with high interest rates. A two-week payday loan that charges $15 per $100 borrowed translates to a 400% annual percentage rate (the yearly cost for a loan). You repay a payday loan by giving the lender authorization to take the money out of your bank account on your next payday.
What happens if you can’t repay your payday loan when it’s due? You could be forced to renew or roll over your original loan. You’ll pay a whole new set of fees every time you do that. And when you pay just this fee, you’re not paying down your current balance, which only increases how much interest you owe. Payday loans can lead to a deep debt spiral, leading you to need debt relief. The average payday loan borrower renews eight times.
Plus, most payday lenders don’t report your payments to the credit bureaus. This means a payday loan can’t help you improve your credit score even if you repay it on the original due date as agreed.
Better Quick Cash Options
Need a loan sooner rather than later? Here are better options than payday loans.
Credit card cash advance
A credit card cash advance isn’t generally a great idea. But it’s better than a payday loan. Note that the APR on a cash advance may be higher than your credit card’s go-to APR for purchases. And unlike a purchase, if you take out a cash advance, you’re charged interest immediately—there’s no grace period.
Payday alternative loans (PALs)
Do you belong to a credit union? Ask about payday alternative loans (PALs). These are small-dollar loans that come with repayment terms of one to six months, and an application fee of up to about $20 to process the loan.
Small-dollar loan through your bank
Your bank might offer small-dollar loans. These come with a small fee, and you can borrow a few hundred dollars, paying it back over a few months.
Payday cash advance apps
If you often run out of money between paydays, you could consider signing up for a cash advance app. They offer interest-free cash advances against your next paycheck. Most of the time, there’s no fee if you can wait two or three days for the money. If you need same-day cash, you might pay a small fee for the advance. Some apps charge a monthly membership fee. Generally, you’re limited to borrowing a few hundred dollars.
Government assistance
It likely won’t be an immediate infusion of cash, but depending on your situation and needs, you might qualify for federal or state assistance programs. Check out USAGov’s financial hardship page for more information, or visit your state government website for resources closer to home.
Borrowing from family or friends
If you need a little cash to get you over a financial hump or pay an emergency bill, you could try asking family or friends. Just put the loan terms you agree to in writing, and commit to paying them back as agreed.
Level Up Your Finances
You’ve got options for cash in a hurry. Doing the research now is a smart financial move that could save you money the next time you’re in a pinch. Eventually, building an emergency fund could help you avoid the need for cash advances. If cash is tight because you have a lot of debt, get a free debt evaluation from one of our experts to explore possible solutions.
Author Information
Written by
Ashley Maready
Ashley is an ex-museum professional turned content writer and editor. When she changed careers, she was finally able to focus on turning her financial situation around. She went from deeply in debt to homeowner in two years. Ashley has a passion for teaching others about better living through better money management.
Reviewed by
Kimberly Rotter
Kimberly Rotter is a financial counselor and consumer credit expert who helps people with average or low incomes discover how to create wealth and opportunities. She’s a veteran writer and editor who has spent more than 30 years creating thousands of hours of educational content in every possible format.
How much money should I have in my emergency fund?
Start with a goal of saving $1,000, or even $500. The next level could be enough to cover all your expenses for three months without any money coming in. Eventually, you want to build this up to six months' worth. This is going to take time, and unexpected expenses will occasionally prevent you from saving. That's why your goals should be milestones, not a faraway finish line.
Where should I keep my emergency fund?
Your emergency fund should be immediately accessible without a penalty. That would usually mean in a savings account at a bank or credit union. Choose a high-yield savings account so that you can earn interest while you save. Online banks tend to pay the most interest on savings.
What interest rates do people with low credit scores pay for personal loans?
Personal loan interest rates top out at about 36%. That’s much lower than rates for payday or title loans. The exact rate you're offered depends on your credit history, income, and other qualifications.