If you already have a credit card and you need access to funds pretty quickly, you might already have enough credit to go ahead and use the card straight away. If that's the case, it's worth planning your repayments to help keep interest charges down.
You can also apply for a credit card limit increase, with approval likely within a few days. Your credit card company will review your financial situation including things like your income, current debts and employment history, and if they’re happy with what they see (i.e. your situation matches their criteria), you can expect your limit increase to come through a day or two later.
Whether you’re applying for a new card or a credit limit increase, the bank or credit card company will follow a process similar to reviewing your personal loan application, including obtaining a copy of your credit file and assessing your financial situation.
It’s worth noting that if you’re planning to apply for a home loan in the near future, getting a personal loan, requesting a credit card limit increase or getting a new credit card can affect your loan application.
Buy now pay later
Buy now pay later (BNPL) schemes are a little different to regular loans and credit facilities because they’re a form of interest-free finance – but that doesn’t mean they’re free.
Platforms like Afterpay, Zip and Klarna allow you to buy something right away but spread the cost out over time by repaying it in regular instalments. They can be a convenient way to pay for things like furniture or dental treatments, such as a root canal. It depends on the BNPL service how much you’ll be able to spend, as some have limits of $1,000-$2,000, so if you need $5,000, check that the plan will allow that.
The benefit of these interest-free platforms is that they give you the chance to spread the cost of purchases over time, usually about 8 weeks. If you need longer than that to repay the debt, you could consider a credit card that offers a BNPL program.
You might have seen these in shops like Harvey Norman: they allow you to buy an item and pay 0% interest over a period of 12 months, or even longer. Provided you repay the debt by the due date, you won’t pay any interest.
However, with all of these schemes and offers, there may be usage, monthly and payment fees and charges that apply. The late fees and default fees if you miss a repayment can also be really high, so make sure you’re aware of all the possible costs before you apply.
Payday loans can be helpful when you need cash fast, but they are the most expensive option when compared to other types of loans.
They are a type of personal finance that is usually made available for terms between 16 days and 1 year. They are one of the most expensive ways to borrow money and should generally only be used for financial emergencies.
Overall, there are a few different ways you can finance an emergency expense and they each have benefits and drawbacks. Make sure you compare all the different fees and charges involved, and remember the ideal decision for you is the one that best suits your needs – and that may not be the cheapest option.
Keep in mind, it can be expensive to borrow small amounts of money and borrowing may not solve your money problems. While it’s super convenient to cover the cost of major dental work or an expensive car repair that pops up out of nowhere, it’s not the ideal way to help you manage day-to-day bills.
So before you consider borrowing money, consider other options, like talking to your electricity, gas, phone or water provider to see if you can work out a payment plan. You can also call the National Debt Helpline on 1800 007 007 to talk to a free and independent financial counsellor.
Sarah Megginson is senior money editor for Finder. She was previously managing editor of Australian Broker magazine, Your Investment Property magazine and online home loan comparison site, Your Mortgage. Sarah has worked as a finance and property journalist for more than 15 years.