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.  

Why You Need to Invest in an Emergency Fund Today

People consider their 30s to be the prime of their lives – it falls right in the middle of working hard to establish yourself and preparing for retirement. It’s the only decade of your life where you don’t have to think about what the future holds because you’ve already tied a bell around its neck. 

invest money

When you’re at this juncture of your life, it might be difficult to imagine why you might ever need an emergency fund. 

It is a misguided belief that emergency funds are only ever needed when you’re short on funds or when you’re preparing for a possible crisis. Not every “emergency” has to be a life-altering event from which you would never recover. More often than not, what constitutes an emergency might just be a wayward hospital bill. 

Although I do encourage all the readers to always be prepared for the most dramatic situations – I believe prevention is better than cure, sue me – it’s important to note that an emergency doesn’t always have to be a near-death event at all. Sometimes, an emergency can just be a sudden expenditure you couldn’t reasonably foresee. And it is precisely for this reason that you should invest in an emergency fund as soon as possible. 

Your emergency fund will help you to cope with and overcome any sudden financial blows you may face in life. The main goal of investing in an emergency fund is to safeguard yourself against debt. 

Every one of us is bound to face some unfortunate life events that will leave us devastated and in tears. Dealing with emergencies like this is the primary need for an emergency fund:

  • An unexpected medical emergency in the family,
  • Death of a loved one leading to funeral expenses,
  • Losing a job or livelihood,
  • Crisis in the family, among other things. 

Big, life-changing events like these already come with their own set of consequences. If you’re unprepared to bear the cost of events like these, it may become twice as traumatizing and not just for you but for your loved ones as well. 

Going into debt as a result of paying for a dear one’s cancer treatment can have disastrous effects on your family life, your health, and the well being of your entire family. 

However, there might also be some smaller but equally unexpected events that can be assuaged with an emergency fund: 

  • Pet-related medical expenses,
  • Moving from one state to another on short notice,
  • Car troubles,
  • Losing disposable income, among other things. 

If you try to face situations like these with no preparation or planning, they will add to your debt. 

While these incidents might not be major enough to tip your life into total disarray, they can affect your finances badly enough that you might have to cut down on certain expenses you were able to easily afford before. This could lead to a shift in lifestyle, and such changes can be quite hard to adjust to, especially if you have children in your family. 

If you’re wondering whether to start investing in that emergency fund now or two years later, my advice would be to start as soon as you can. Like I always say, it is never too early to plan a safe, secure, and hassle-free future.