No Emergency Fund? 4 Smart Ways to Get the Cash You Need ASAP and 2 to Avoid

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My dishwasher broke down a few weeks ago and I had to spend nearly $600 on a new one. Luckily, I had an emergency fund, so I had the cash I needed to pay the bill. But not everyone has this option.

When you don't have an emergency fund in a high-yield savings account , you may be tempted to find the fastest way to cover the cost or you might resign yourself to high-interest debt. But it's worth taking some time to think through all your options before you make any moves.

Below, we'll look at some of your best strategies and some you may want to steer clear of.

4 options to cover emergency costs

Here are some of the best things you can do if you don't have an emergency fund.

1. Payment plans

Depending on the cost, you may be able to set up a payment plan with the provider. For example, if you have a visit to the emergency room, the hospital may let you pay off your debt over time rather than in a single bill. This may be a little easier on your budget, and you may not even have to pay interest on what you owe. However, not all lenders have programs like this.

2. Credit cards with 0% introductory APR period

A credit card with a long 0% introductory APR period could be a good fit if you expect that you'll be able to pay the balance off in full before the 0% APR period expires. It's effectively like an interest-free loan during this time. Be sure you review the card's terms before going this route so you understand what you're signing up for.

3. Buy Now, Pay Later (BNPL) services

If you need to purchase a physical item, like a dishwasher in my case, you might be able to finance it using a Buy Now, Pay Later (BNPL) service. These are short-term loans, and many providers don't charge interest.

Terms are generally pretty strict. You have to make regular payments every few weeks, and failure to do so could result in additional charges. But if you can pull it off, you'll find this a reasonably affordable option.

4. Personal loans

Personal loans charge interest, and rates can sometimes be quite high since these loans don't have collateral. But they also enable you to borrow larger amounts and give you a fixed monthly payment. You may also have some flexibility with the repayment terms.

2 strategies to avoid

These options might seem tempting when you're in a financial bind, but try to avoid them when you can.

1. Payday loans

Payday loans are among the most expensive loans you can find. Most charge around 400% APR. That means you'll pay about $15 for every $100 you borrow. Many people who take out payday loans find themselves taking out another to pay back the first, leading to a vicious cycle. A personal loan may help you break out of this trap.

2. Credit cards without a 0% APR period

Credit card interest rates are much lower than payday loan rates, but they're still high. It could take months or even years to get out of credit card debt, and this might interfere with your ability to cover your routine expenses as well as other emergency costs.

There's no one-size-fits-all solution here. Consider how much you need to borrow and how quickly you need the cash. Then, see which of the above options best fits your needs.

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