Option | Collateral required | Money available within 3 days | Potential loan amount provided | Interest rates | Chances of approval |
|---|---|---|---|---|---|
Personal Loans | No | Yes | Medium | Medium | High |
Home Equity Loans (HEL) | Yes – Home equity | No | High | Low | Medium |
Home Equity Lines of Credit (HELOC) | Yes – Home equity | No | High | Low | Medium |
Credit Cards | No | Yes | Low to Medium | High | High |
Refinancing Your Mortgage | No | No | Medium to High | Low to Medium | Low to Medium |
401 (k) loans | No | Yes | Medium to High | Low | High |
Personal Loans: Unsecured personal loans can be used for financing an emergency. These loans are not tied to your home's equity, however they may have higher interest rates than secured loans.
Home Equity Loans (HEL): A home equity loan allows you to borrow against the equity in your home. These loans typically have fixed interest rates and fixed monthly payments. The loan amount is based on the equity you have in your home.
Refinancing Your Mortgage: If interest rates are lower than when you initially obtained your mortgage, you might consider refinancing.
401(k) Loans: If you have a 401(k) retirement account, some plans allow you to borrow from it for certain purposes. However, this option should be approached with caution, as it can impact your retirement savings.
Home Equity Lines of Credit (HELOC): Similar to a home equity loan, a HELOC allows you to borrow against the equity in your home. However, it functions more like a credit card with a variable interest rate. You can borrow as needed, up to a certain limit, and repay over time.
Credit Cards: While convenient, be mindful of high-interest rates, and try to pay off the balance quickly to avoid accumulating debt.
