Emergency Money: 5 Best Borrowing Options for Financial Emergencies

According to statistics, the average American household carries over $100,000 in debt. 

This speaks of how important money is for Americans to pay for expenses they may not be able to afford. It also speaks of how important it is to learn the various ways to stay out of debt. 

Part of the answer to staying out of debt is having emergency money. 

Emergency funds, also known as rainy day funds, is nothing but a backup so you don’t have to put money on the credit card. It’s a relief system. It gives you some financial stability in case something unexpected happens. 

Here’s a guide on the 5 best borrowing options for financial emergencies. Now you can feel financially secure with these incredible borrowing options and payback without drowning in debt. 

1. Cash Advance Loans

A cash advance loan option is often short-term and can help you get an emergency loan.  Some terms can only be about a week or two, or you can find cash advance options that offer a repayment option within 3-months. 

2. Personal Loans

Irrespective of your credit score, some lenders offer quick personal loans that you can use for any purpose you like. A personal loan helps you get a specific amount at a specific rate. 

You can also get a personal loan for a small amount of money. Based on your credit, you can get a loan for an emergency situation based on what you need. 

3. Payday Loans

This is another great emergency loan option. Payday loans are paid back all at once on your next payday. 

Although they can have interest rates, payday loans are a great option when you need money right away and you can pay it back quickly. 

4. Low-Interest Credit Cards

Finding a low-interest credit card, preferably around 0%, gives you the option to borrow money with a credit card and pay it back in 6-months or however long before it starts accruing interest. 

Just remember, applying for a credit card means it will result in a hard inquiry, which can lower your credit score.

5. Home Equity Line of Credit 

Lastly, a home equity line of credit is when you use your home as collateral when you are paying for a loan. This gives you some flexibility if you have a home and need financial assistance. 

Just be aware of how soon you need to pay back the loan. You should also keep an eye on the interest rate of the loan, so you aren’t paying way more than what you originally borrowed.  

Why Emergency Money Isn’t an Option, It’s a Necessity

Emergency loan help is always available, it’s just a matter of finding where it is. 

You don’t want to get stuck with credit cards or forms of emergency money that will leave you a worse situation than before you borrowed the money.

You can also still find ways to get emergency loans with bad credit, no payback loans, and other forms of loans. You just have to be willing to find and apply to them. 

You can learn more about managing your money and financial tips on our website or by contacting us.  

Simple Ways to Avoid Debt

debt issues

Nobody wants to be in debt. Yet in today’s world of consumerism, it creeps in on us unexpectedly from time to time.

The best advice you will get from people when it comes to avoiding debt is to avoid being in debt. But as you must be aware by now, that it is easier said than done.

Strategies You Can Follow

To help you find an easy solution to end the never-ending cycle of loans, mortgages, and debts, here we have put down some simple-to-follow ways:

  • Make a plan for your budget
  • Include a To-Do expenditure list in the plan or to put it simply the unavoidable expenditure, for each month
  • Chalk out all the unnecessary or frugal spending from the previous month
  • Try to avoid them at all costs
  • Keep a tab on your credit card(s)
  • Set a priority reminder on any pending dues or bills that you need to clear as fast as possible
  • Try to avoid taking loans from banks or otherwise, if not essential
  • Make a habit of paying the whole amount either in cash or online transfer, instead of indulging in EMIs, monthly payments or other such schemes
  • When applying for loans try to stick to those lenders that offer you the lowest interest rates
  •  It is always better to stick to reliable lenders
  • Keep a check on impulse buying
  • Always keep a separate account as emergency money. It can come in hand, just in case you need to get out of a sticky debt situation
  • Do not invest in shady schemes that offer unrealistic returns
  • Lessen the number of cards you keep
  • Take the help of available apps that can help you organize and manage your finances better

Even if you find yourself landing in debt despite all the steps you took, you can still remember these few simple things,

  • Panicking would not help you
  • Try to make a step-by-step plan to figure your way out
  • If you have already started the emergency account, see how much of the debt you can clear immediately from that fund.
  • Don’t take further loans from anyone to clear your current debt!

Final Note

Have faith in yourself as surely this too shall pass. Finally, if you need some light-hearted inspiration to help you feel better and to understand that you are not the only one to go through debts, go ahead and watch ” Confessions of a Shopaholic.” If every other method fails, a good movie can surely give you a boost!