Personal Loans for Tackling Financial Emergencies
7/6/2022
2 minute read
Tackling financial emergencies Personal Loans for Tackling Financial Emergencies
It’s difficult to be prepared for unexpected expenses, even if you’ve planned ahead and have some savings. According to a recent survey conducted by Bankrate, fewer than 40% of Americans have enough money on hand to cover a surprise expense of $1,000 or more.
If your budget is already stretched thin at the time a surprise cost hits, it can become a major setback and cause a lot of stress. Some expenses and bills that can catch you off guard financially may be related to:
• Medical and/or dental care
• Car fixes
• Home repairs
• Appliance replacement
• Illness or death of a loved one
• Caring for a family member or friend
• Unemployment
• Damage or relocation due to natural disasters
• Veterinary bills
What can I do to cover the cost of an emergency?
If you have an emergency fund, you can use it to pay for all or a portion of whatever surprise costs come up. But be careful to distinguish a true emergency from other unplanned costs. The types of expenses listed above are good reasons to tap into an emergency fund. However, buying gifts or upgrading to the newest mobile device is not. After you’ve spent money from your emergency fund, try to replenish it as soon as possible.
What if you have some cash now but won’t be able to cover the entire bill? Depending on the expense, you may be able to negotiate the cost of your bills, work out a payment plan, or use a financial assistance program. This could allow you to make payments you can handle rather than be overwhelmed by paying the entire bill at once. Plus, it could help you avoid going into debt.
Many people don’t have extra money available to handle financial surprises and may turn to fast, high-interest borrowing options like payday loans or credit cards. Unfortunately, these can add debt on top of the original emergency expense, which means more, and higher bills to pay when your budget is already tight.
Another borrowing option is an unsecured personal installment loan. This type of loan can provide you with the immediate funding you need and allow you to make affordable payments over time with a fixed interest rate. Applications are usually short and simple and can even be submitted online. A personal loan can be a good solution when you need fast funding and flexibility. If you’re in need of a personal loan or would like more information about your options, stop by a local Lendmark Financial branch near you.
