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Cheapest way to borrow $5000: credit card v personal loan v Afterpay

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We're lucky that we can access cash when we need it in so many different ways, whether it's borrowing the money, putting it on the credit card or relying on a "buy now pay later" option.

Of course, there are eligibility requirements that you have to meet as well as a commitment to repay the money, so don't assume it's a quick fix and negates the need for saving.

No matter how you choose to access extra funds it's important to treat the loan as short-term finance and aim to pay it off as quickly as possible within the next 12 months.

This not only helps clear the cost but it will help minimise any interest you'll pay.

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Now with so many options to choose from, you really need to weigh up the cost of each and decide what works best for you. Here's what to be mindful about when considering your options for short-term finance.

Afterpay and Zip Pay have gained the attention of shoppers for offering the modern-day equivalent of layby.

You can take home the item today and pay later (within two months), which is all well and good if you're in a position to meet the fortnightly repayments without fail.

However, if you're not then be prepared to cough up missed payment fees of up to $68 in some instances.

Credit cards can be a convenient option for those with the plastic in their pocket. The tip here is to make sure you've got the right card.

Rewards cards often have annual fees and higher interest rates, so if you're considering putting an extra $5000 on your rewards card and paying it back within 12 months it could cost you a hefty $300 or so more than a low-rate card.

If borrowing from the bank of mum and dad is an option, then see if you can sweet-talk them into limiting the interest they charge - not to the detriment of their savings, of course.

This is why coming up with a timeline for repaying the money is important.

The alternative might be applying for a personal loan.

Unlike a credit card, where you're required to make only minimum repayments, the structure of a personal loan means that you'll be locked into a time period and regular repayments. The upside to this is it will force you to clear the loan quickly.

However, personal loans have an establishment fee, which can add an extra $100 or more to your borrowings.

Another option for anyone with a home loan who is ahead with repayments is to redraw from the extra contributions. This option means you are likely to be able to access the funds at a lower interest rate than with most credit cards and personal loans.

However, an easy mistake here is taking too long to pay the money back into your loan. If you stretched repayments over the life of your mortgage - typically 25 years - your $5000 loan could cost you over $8000 when you add in the interest.

When taking out short-term finance be sure to set yourself a realistic loan amount, give yourself a deadline to repay it (assuming it's not set for you) and stick to the repayment plan.

RELATED: How to take out an interest-free loan

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Belinda Williamson is spokesperson for Canstar.
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