Borrow Money Safely In Crisis: Bankrate’s 2023 Data And Analysis

The high inflation and rising rate environment is putting the US economy on an uncertain path. Economists now estimate that the country has a 64% chance of going into recession in 2023. Interest rates and unemployment are also expected to rise, further straining the finances of millions of Americans already in crisis.

Bankrate’s annual emergency savings report for 2023 revealed that when faced with an unexpected loss of income, more than two in three Americans (68 percent) will be concerned about covering one month’s living expenses. Generation Z shows the most concern of any age group; 85 percent worry about saving enough money for a month, followed by 79 percent of millennials. Boomers are the least concerned, with only 53 percent worrying about this scenario, and Gen X is in the middle with 69 percent.

Saving can be difficult in tough economic times, but doing so is the best way to reduce debt or protect yourself in unexpected situations.

  • According to economists, the probability of the US economy going into recession in 2023 is 64%.
  • Interest rates are also expected to rise above 5%, making borrowing more expensive.
  • Personal loans currently have an average interest rate of 10.6%, which is slightly above pre-pandemic levels.
  • Default rates for all loan products have increased by 0.23% since January 2022.
  • Rising inflation and rising rate environment will increase serious defaults, especially in credit cards and personal loan products, to levels not seen since 2010.
  • Inflation, rising interest rates and employment changes have affected Americans’ ability to save, with 74% saying they are saving less than they did a year ago because of one of these factors.
  • 85% of millennials and 79% of millennials will worry that they can afford a month’s worth of expenses if they lose their primary source of income.
  • 1 in 4 Americans say they would rather use their credit card than use their savings to cover a major emergency expense they may pay over time.
  • If an unexpected $1,000 is spent, only 43% of Americans can afford it using their savings.
  • 57% of Americans say current economic conditions are negatively affecting their lives, and 53% say they have delayed important financial milestones because of the state of the economy.

Most financial experts advise not to borrow when you are in a tight financial situation, as this can lead to a vicious cycle of debt. However, if borrowing is your only viable option, be sure to consider all available options – pay particular attention to interest rates, terms, and fees, as there are better ways to borrow than others.

Safer lending options

When it comes to borrowing money in a time of crisis, these are some of the safest bets.

Friend or family member

If you only need to borrow a few hundred dollars, asking your closest friends or family member to lend you money can be a great option. While you may be shy or even embarrassed to ask for such a favor, borrowing money from someone you know will give you the flexibility to repay at your own pace without having to worry about dents on your credit report.

0% April credit card

Some credit card companies offer consumers a 0 percent introductory offer where any purchase they make over a period of time (usually between six and 15 months) is interest-free. However, interest is accrued on the remaining amount unpaid after the initial period ends. Additionally, you will need excellent credit to qualify for these offers.

Personal loan from bank or credit union

When it comes to loan products, personal loans have one of the lowest interest rates available. Currently, the average interest rate for consumer loans is 10.6 percent, while the average interest rate for credit cards is 20.15 percent. One of the benefits of using a personal loan to finance an emergency is that they have fixed interest rates and terms, so your payments will stay the same for the life of the loan. In addition, many companies are making monthly payments more manageable by giving borrowers two to seven years to repay their loans.

On the downside, some lenders may charge origination fees or upfront penalties, so be sure to check out the terms and conditions before applying.

Buy now, pay later

A buy now pay later or BNPL is a type of short-term installment loan that allows you to finance interest-free purchases over a specified period of time (usually between four and six installments). Although these credits are awarded on a credit basis, you don’t need a perfect score to qualify. However, if you do not repay your loan in full after the interest-free period, you will be charged interest on the remaining amount. In addition, these loans lack liquidity and can only be used in certain stores.

Apps that allow you to borrow money

If you need urgent cash, a cash advance app may be the solution. These apps allow you to borrow money for your next paycheck, and many do not charge any additional interest or fees. However, you should be careful when using them as they can lead to overspending.

Still, if this is an option you’d like to explore, here are some apps you can try:


Designed as a budget management app, Brigit allows members to instantly access up to $250 with its Instant Cash feature. The company does not require you to go through a credit check to access this feature and does not charge any late payment fees. However, to access the Instant Cash feature, users must pay a monthly subscription fee of $9.99.


To access a cash advance through Chime, you must have a checking account with the company. Once you have it, you will have access to the SpotMe feature, which allows you to withdraw up to $200 more from your account at no cost.


Dave is a digital banking platform. Among its services, the company offers a feature called ExtraCash that allows users to withdraw up to $500 in cash without any interest or fees.

Payday loans and other risky lending options

There are some types of emergency loans that should be avoided at all costs. This is because they are highly risky products that offer unfair terms and extremely high interest rates that make it almost impossible for borrowers to repay their debts. These are two of them.

payday loans

Payday loans allow borrowers to withdraw small amounts of cash (usually no more than $500) for extremely high interest rates and fees. While some states limit interest rates to 36 percent, in others, such as Texas, borrowers can expect to pay interest of up to 664 percent. Moreover, only 14 percent of consumers who use these loans can repay them, so you should avoid using them altogether.

car loan

When you take out a car loan, you show your car as collateral. These loans are usually short-term (up to 30 days) and you can borrow up to 50 percent of your vehicle’s value. Car loan comes with exorbitant fees and interest rates of up to 300 percent, and if you don’t pay your loan, you can lose your car.

Budgeting in uncertain economic times can be more difficult than ever, as there are so many variables out of our control.

Ralph Bender, CEO and founder of Enduring Wealth Advisors, says the most effective way to budget when things get tough is to prioritize the essentials (food, health, shelter, etc.) and cut back on everything else.

“Unfortunately, a lot of the reasons we get into trouble is because we’re locked into contracts for ‘desired’ things,” Bender adds.

Mac Gardner, founder and CEO of FinLit Tech, says it’s crucial to get in touch with your creditors if you have debt. “If you see tough financial times ahead and you have a loan or financial obligation, be proactive and reach out to that institution. They will be more considerate of customers who reach out to explain their situation and look for ways to settle their debt obligations.”

He also adds that it’s important to keep cash flowing in tough times, as most banks won’t lend to those who lack liquidity, even in emergencies.

“In today’s resilient economy, you can generate cash flow through ridesharing platforms like Uber or Uber eats. If you’re a collector, it may be wise to value your collection and use tools like eBay or other platforms to create liquidity,” says Gardner.

  • The two surveys referenced above were commissioned by We got the results as follows:

    • Bankrate’s 2023 annual emergency savings report. This work was done for Bankrate on SSRS’s Opinion Panel Omnibus platform. The SSRS Idea Panel Omnibus is a national, bi-monthly, probability-based survey. Interviews were conducted between 16-19 December 2022 among a sample of 1,028 respondents in English (1.003) and Spanish (25). The survey was conducted via the web (998) and telephone (30). The margin of error for total respondents is +/-3.5 percentage points at the 95% confidence level. All SSRS Omnibus data are weighted to represent the target population.
    • Poll: The majority of Americans are postponing financial milestones, giving up activities or events because of the state of the economy. commissioned YouGov Plc to conduct the survey. Unless otherwise stated, all figures are from YouGov Plc. The total sample size was 2,442 adults. The fieldwork was carried out between 19-21 October 2022. The survey was conducted online and meets strict quality standards. It used a non-probabilistic example that used quotas in the foreground during aggregation and then used a weighting scheme designed and proven to provide nationally representative results on the backend.


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