Very few people escape the need to borrow money during their lifetime. A loan can help you to cope with a financial emergency or fund an important purchase. Here's some advice for all those who are looking for a loan or looking for ways to get extra cash for any urgent purchases or emergency expenses…

Think twice before going to 'loan sharks'

Firstly, you should consider asking a trusted friend or family member if they can’t help you. Furthermore, a word of warning: think twice before going to micro lenders (aka loan sharks) as this could be one of the biggest financial mistakes you make in your lifetime.

Where a regular bank may charge 18 percent interest for a personal loan per year a micro lender could charge 30 percent for just one month. Say for example you borrow R1000 from a loan shark, at the end of that month you will have to pay him back R1300.

Secondly, asking assistance from your employer is an option if you have a good relationship with your company. They may give you a short-term loan that can be deducted from your salary each month.

Consider ‘borrowing’ from your savings

If you have been clever enough to have a savings account, you could also consider ‘borrowing’ from your savings. This option, however, is not without its drawbacks as tapping your savings takes you a few steps back from the goals you have set yourself.

Cashing in a savings account may work or if you have some unit trusts you could consider selling them. Try not to cash in on contractual savings plans like endowments or life policies. If you cancel an endowment before it matures you will be liable for harsh penalties.

If you have no liquid investments, the next place to look may be your bond. Although borrowing against the extra value in your home loan can be one of the best options, make sure you pay back the extra loan amount as soon as possible — the last thing you want to do is to finance your golf clubs over 20 years!

Ask your bank for a personal loan

If you do not have a home loan you could approach your bank for an overdraft or a personal loan. There is no such thing as free money, so even if your bank manager thinks you are his most fabulous client you will still be charged interest on your loan.

If, for whatever reason, you do not qualify to borrow money from the bank you may have to look at your existing budget to see what you can cut back on to leave with extra cash for your emergency expenses. Better yet, look around your house for things that you may no longer use or need and you could sell these to get your hands on quick cash. We often have cupboards full of things that we no longer use and as the saying goes, 'one man’s junk is another’s treasure'.

There are many ways to advertise your unwanted possessions — you can log onto www.junkmail.co.za, www.ebay.com or www.gumtree.com. There are also community newspapers that offer free classified services. Don’t be shy, you may think that no one will buy that hideous garden gnome that Aunt Agnes bought you for Christmas in 2006, but there is someone out there that will have it as their centre-piece on the dining room table.

Did you know?

Did you know that it is important to check your car insurance annually? Most people overpay for their car insurance, so call your broker if your circumstances have changed. You could qualify for lower premiums.

Did you know that people often have debit orders for services they no longer use or accounts that are fully paid-up? Scrutinise your bank statements and cancel any obsolete deductions.

Did you know that if you don’t have a chronic disease, you can downgrade your medical aid to a hospital plan? This could save you as much as R500 per month. Speak to your medical aid company to evaluate whether you are on the ideal plan, for your personal circumstances.

Did you know that second-hand clothing stores are popping up everywhere? You can buy designer wear for a fraction of the price. Look for one in your area. You can also sell your unwanted clothing for extra cash.

Did you know that if you are wondering where your money goes every month, you should take time to scrutinise your spending habits? You may be able to free up some cash.

This information was provided by Myles the Butler from the Achiever Club at Standard Bank (go to www.www.standardbank.co.za/achiever for more about Myles).

Do you have any tips for someone who needs cash in a hurry?

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