At one time or another when we are in a crisis we need to make hard financial decisions to raise cash quickly
By: Phoenix Lee/
Depending on how desperate for cash you may find yourself, the list below helps you make hard financial decisions and explore a few ways to raise cash quickly in a short amount of time. Taking into consideration that there is no savings, here are a few more ideas to help you make those hard financial decisions before starving or turning to a life of crime.
1. Sell your stuff
To raise cash quickly, look through everything you own and find things you no longer use but are still in good condition. Once you have all the items together, you can have a garage sale, or sell them in Carousell or Facebook Marketplace. Or, you may be able to sell certain items such as baby clothes online, if the clothes are in good condition.
2. Try a pawnshop
Previously relegated to back alleys and heartland neighbourhoods, the pawnshop is now considered a viable place to raise cash quickly and make hard financial decisions.
Pawnshops are so hip that they are now found even in shopping malls. Pawnshops are so handy that anyone – including those that drive Mercedes or BMWs – can pawn off fancy items for cash quickly and without any shame. Pawn shops have now also turned themselves into fancy outlets where you can buy gold jewelry, high-end electronics and branded items on the cheap.
Everyone has jewelry or electronic equipment around the house that can be used to raise cash quickly. The pawn shop operator appraises the item, and will loan a percentage of its value while giving the borrower a six months to pay it back and get the item back. If you do not go back to pay off the loan, then you forfeit the item. But if you were not using the item anyway, then losing it would not be too painful.
3. Borrow money from a relative or friend.
The discomfort of borrowing money from a relative or friend can be eased by putting everything in writing. The best way to do it is by offering to pay interest on the cash, such as 5%. This rate is better than what they would get from a regular savings account at a bank, yet not as high as a credit card. This way, the loaner feels that he or she is getting something out of it while doing you a favor.
Outline the terms of the loan in the loan agreement, have both parties sign it in front of a witness. By all means, pay the loan back as soon as you can or risk losing your relationship.
Image credit: Flickr l Aleksandr Zykov
4. Think about all the money you may have left as a deposit
Many utility companies require an initial deposit when you first set up an account, especially you have bad credit or no credit history. In some cases, this money is yours after 12 months and you should call your utility company to reclaim the money. Although it’s supposed to be automatically returned, the companies sometimes take a long time or possibly neglect to send it all together.
5. Check your whole house for forgotten money
Check through your couch or your car and you will find a lot of change. Go one step further and check through pockets of all your jackets, old purses and even old bags you may have forgotten. You will be surprised as to what you may find with that stack of old photos.
6. Rent out your room
If you own a HDB flat or a private apartment, rent out a room to raise cash quickly and make hard financial decisions.
You can easily raise $500 – $1500 for a spare bedroom and this can come in handy in a financial crisis. It may be uncomfortable for you to share your home with a stranger (or strangers), but it is better than facing bankruptcy.
7. Get a second or third job
While considering this, do not be too picky over the type of job–any honest work should be considered, whether it’s driving a Grab or behind the cashiers in MacDonald’s. The point is, this is a short term solution until you get “back on your feet.”
8. Get a home equity loan
If you own a private residential property, a home equity lets you borrow money, while using your house as collateral. Home equity loan is another option available to homeowners who may have a tight cash situation but have have a valuable house at their disposal, which they may sell and downgrade. But a home equity loan lets you get money out of your house, without having to lose it.
There are plenty of advantages: when your house is the collateral, the bank feels a lot more secure; they know you can’t exactly pack up your house and run away with it. Because there’s something they can foreclose on, banks consider home equity loans to be low-risk, secured loans. That means they charge a super-low interest rate, seldom above 1.3 per cent per annum. For reference, that’s less than a third of your CPF Ordinary Account rate (up to 3.5 per cent per annum), and about 1/6th of a personal loan rate (about six per cent per annum).
That super-low interest rate means home equity loans are quite cheap, and can provide a much bigger loan than you’d get through, say, a personal installment loan. Most other, unsecured loans can only lend you up to four times your monthly salary.
On top of this, the government in 2017, made regulatory changes to home equity loan restrictions. If your house is already paid up, you can borrow up to half its value, without having to meet Total Debt Servicing Ratio (TDSR) restrictions.
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