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Financial emergencies are best described as unforeseen circumstances attached to an unexpected expense, that if not resolved, can cause serious issues. Such circumstances generally pertain to your health, home, or career. The most common go-to would be a credit card or loan, to cover the costs, however, when you have bad credit the options seem to be spread thin.
If you’ve found yourself in the midst of a financial emergency but can’t get a traditional loan or credit card, don’t give up just yet. There are other solutions you could consider to get the money you need and fast.
Check Your Savings Account
The very first place you should check for funds to cover your financial emergency is your savings account. Even if it’s not enough to cover the entire amount, having a large sum reduces the amount of debt you need to go in to resolve your issues.
Ask Relatives and Friends
You might not be able to get a loan from a bank but there are people close to you willing and ready to chip in to see you through this rough patch. Depending on their personal finances, they may be able to assist you with all or part of what you need to get out of the jam. If you are going to go this route, however, be realistic about when you can repay and try to stick to it. It may even be best to put everything in writing so that it doesn’t cause friction later on.
Sell Some Belongings
You may not have the time to purge your entire house and plan a yard sale to make some extra money, but there are things around your house that could get you decent money – and fast. There are vendors that will buy old cell phones and jewelry on the spot for a few hundred dollars. If you have an old car collecting dust in your driveway, you can sell to a junkyard and get a few bucks for the scraps and parts.
Apply for Short-Term Loans
Though traditional banks may have turned you down for a personal loan, you can borrow money from short-term lenders. Many places offer online installment loans with very few eligibility requirements. If you’re at least 18 years of age, meet the minimum income requirements, and have a valid checking or savings account, you could get funds deposited within a few business days. The best part about these loans is that they do not check your credit! You do, however, want to pay this short-term loan back sooner rather than later to avoid higher interest rates and fees.
Borrow From Your Pension or Retirement Account
If you have a pension or retirement account (individual or through your employer), you may be able to take out an application to borrow on it. This would mean you could get a percentage of the funds you’ve saved over the years with a commitment to paying it back in a timely fashion. Failure to do so could lead to fees and penalties on your taxes.
Borrow on Life Insurance Policies
Depending on the type of life insurance policy you have you may be able to borrow funds on a short-term basis to cover your emergency. Again, you want to pay this back timely to avoid penalties, fees, and/or reducing the amount your beneficiaries would receive should you pass on.
Apply for Public Assistance
If you’re dealing with a financial emergency relating to your home or career, you may very well be able to get assistance from the government. There are free programs for qualified applications to receive things like affordable health insurance, food stamps, monthly stipends, rental assistance, utility assistance, and more.
You’re probably wondering how communicating is going to help get you out of a financial jam, but the results might surprise you. For instance, if you received a shutoff notice from your utility provider, you can contact them and explain that you’re experiencing financial hardship and they may have options for payment arrangements so you don’t lose your services. If your car broke down, but you have a good relationship with your mechanic, they may be willing to cut you some slack on the costs or allow you to work out a payment arrangement.
You never know when something could pop up that causes you financial strain. Though the best thing to do is take preventative measures like building emergency savings, decreasing your debt, paying your bills on time, and sticking to a budget, when you’re in the midst of the madness it’s good to know there are other resources like those discussed above, that you can turn to.