1. Person-to-person loansAsking your friends or family for loans can be uncomfortable, but it's the least financially risky option out there. If there's someone in your life who you feel comfortable asking for a short-term loan, do so. Just be careful not to make promises you can't keep. If cash flow is a problem for you at present, commit to making small return payments over several months or even years. And be aware that while person-to-person loans are a lot less financially risky, they can be personally risky. For example, be conscientious about how you spend your money in front of the lendee, and keep an open dialogue about when and how you plan to make payments.
2. Personal loans from a bank or credit unionIf your credit is in good standing, you can apply for a small personal loan from a local bank or credit union. While the bank or credit union you bank with might provide you with a good interest rate and friendly service, it might be in your best interest to shop around a little because interest rates for personal loans can vary. If you own a home, you could also look into home equity loans or lines of credit, which tend to have lower interest rates, but are notably riskier because you've leveraged all or part of your home as collateral.
Taking money from your retirement fund is never a good idea and should be your last resort. However, if this is your only option in an emergency, be diligent about paying it back and borrow as little as possible. Borrowing from your 401K has no effect on your credit rating and usually doesn't cost you anything to withdraw. In fact, many 401(k)s have easy repayment options already in place. (It's important to note that these types of loans usually can't be taken out immediately, you might have to wait several days or a couple of weeks for the loan to process.) While these loans do usually have low interest rates, you're essentially repaying the money back to yourself, with interest. The biggest risk associated with 401(k) or retirement account loans is that if you do leave your job before the loan is repaid, you may only have 60 days to repay in full, or you'll face early withdrawal penalties.
If you need help preparing for the unexpected, let us educate you with our Emergency Fund 101. And if you're still considering taking out a payday loan to address an urgent financial need, you should find out a bit more about how these types of loans work before going down that road.