Emergency expense but no emergency savings? The pros and cons of 6 options for quick cash

A personal loan isn’t from another person; it’s simply a loan you obtain from a financial institution like a bank or credit union.

Pros: You can typically get a personal loan quickly (sometimes in just a matter of days), the interest rates are fixed (although often high, but lower than credit cards), and repayment terms are set, meaning you can figure out the impact on your monthly budget.

Cons: It may require a reasonably good credit score to obtain both the loan and a favorable interest rate. Some institutions may require you to pledge an asset (like a car) to guarantee your repayment. And, because the loan terms are open-ended, you may be tempted to borrow more than the amount of the actual emergency expense.

Charging an emergency expense to an existing credit card is an immediate way to pay for a true emergency.

Pros: Because you already have the card, there are no applications to fill out and, if you’re able to pay for the charged amount in the 30 days, no interest to pay either. Some credit cards offer purchase protection in select instances and for a certain length of time—say an item gets accidentally damaged in the first few weeks after you make a purchase.

Cons: If you stretch out your credit card payments, you’ll accrue very high interest charges (probably over 20%). That can turn what might have been a short-term obligation into a long-term financial strain, especially if you miss a payment and are hit with late fees. Carrying a balance can also negatively affect your credit utilization ratio (the amount of credit available to you that you’re using) and your credit score.

A home equity line of credit (HELOC), lets you borrow against the equity in your home as needed, much like a credit card secured by your property. It typically comes with a variable interest rate and you can draw funds up to your approved limit during a designated “draw period.”

Pros: With a HELOC, you have the flexibility to borrow only what you need, when you need it. It can often come with lower interest rates than credit cards. Quick approval may be possible if you already work with the lender.

Cons: Interest rates are usually variable, so your payments could go up over time. Your home is used as collateral, which adds risk if you’re unable to repay what you borrow. You may need a home appraisal and pay fees to open a HELOC, and if you already have one, you can only access funds during a set draw period. It’s also important to review your budget to be sure you can handle the repayments.

This is a very quick, very expensive way to access funds for an emergency expense: It's when you use your credit card at an ATM to withdraw cash.

Pros: It’s super fast—simply a withdrawal. No credit check or conditional approval needed.

Cons: Cash advances can be expensive because they usually come with high interest rates that start accruing right away, plus added fees. They can also increase your credit card balance quickly, making it harder to pay off debt and potentially hurting your credit score.

Some 401(k)s may allow you to borrow a portion of what you have saved in the plan. You must currently be employed, and generally you may borrow 50% of your vested balance or $50,000, whichever is less.

Pros: A credit check is usually not required for a 401(k) loan, and you repay it to yourself rather than a lender. As long as you adhere to the terms of the 401(k) loan, you’ll avoid taxes and penalties. In addition, interest rates and fees are often lower than credit cards or personal loans. Finally, because the money is paid back, you won’t permanently reduce your retirement savings.

Cons: This can slow long-term retirement growth. You’ll miss out on the growth potential of any funds you borrow until they’re replaced. And, if you leave your job, you generally must repay the balance due immediately or face a possible penalty.

There are two types of withdrawals from retirement accounts. The first, a 401(k) hardship withdrawal, is allowed by the IRS for an “immediate and heavy financial need,” and limited to the total to meet that need only. Examples include imminent eviction or disaster relief. The second, an IRA withdrawal, can be made at any time, but if you do so before you are age 59½ and the account is under five years old there is an additional financial cost (see below).

Pros: Typically, you won’t be subject to a credit check and can probably withdraw the funds fairly quickly.

Cons: Unlike a loan, a 401(k) or IRA withdrawal (if allowed by your plan) permanently removes money from your retirement savings; you do this when you have no intention of paying it back. A 401(k) hardship withdrawal is subject to income tax, but not a 10% penalty. With an IRA withdrawal, you will face a 10% penalty unless the need meets certain IRS IRA withdrawal exceptions; examples include birth or adoption expenses or personal emergency. Even if you meet the exception, you’ll be subject to income tax on whatever you withdraw.