Life happens! Sometimes, you can be hit with emergencies requiring that you spend money. In such instances, when there are no funds, it can be quite a burden and finally debilitating, whether it is unexpected medical bills or car or home repairs. However, when you have unexpected financial issues, there are several options you can consider. In unexpected emergencies, you might not be able to think of every option available to you perfectly. However, it is important you know the resources available for use. Let’s find out how you can deal with unexpected financial emergencies.
Emergency loans
Emergency loans are short-term cash advances or e-transfer payday loans that can help you cover unexpected expenses. They are not like traditional loans as repayment is fast, commonly by the next paycheck. Emergency loans are usually characterized by accessibility and speed, offering instant financial relief in pressing situations.
For example, when your car breaks down, you can opt for an emergency loan to repair the car immediately. Another advantage is that they do not take time to process like traditional loans. All you need to do is apply online, get approved quickly, and then receive your funds.
A payment plan
Some types of expenses allow you to work out a payment plan with the indebted institution or company. Some service providers have programs that allow individuals to pay unexpected expenses weekly or monthly with or without interest. Some medical providers, for example, offer payment plans for affordable healthcare costs. This allows you to break down the owed amount into smaller monthly payments that align with your budget.
Borrowing from a family member or friend
Though this option isn’t available to everyone, getting assistance from a close friend or family can be very helpful when in a pinch. If you know anyone with means, they might be willing to offer assistance to help you through your financial difficulty. However, you have to be careful of hurting your relationship. You should only consider this option if you are sure you can repay the loan in full or have another means of payment.
Salary advance
A payroll advance from your employer can help you when you are in financial constraints. A payroll advance involves getting an advance from your employer, which you will repay through deductions from your future paycheck. However, based on your company’s payroll advance policy, you must repay the advance within the specified time. Usually, the company’s policy dictates the loan terms and interest rates, which are identical for every employee irrespective of their credit score.
Borrowing from life insurance
If you have life insurance, such as universal, variable universal, or whole life insurance, you can use your policy’s cash value. A huge advantage of this method is that you might not need to pay taxes when you withdraw money from this policy. However, this is only possible when you do not withdraw more than your premium payments. Taking out more than you have in your account can reduce death benefits, which are taxable.
End note
It is unpleasant and stressful to encounter an unexpected emergency that requires money you do not have. However, you can get out of a financial pinch in several ways. Consider emergencies, loans, salary advances, or borrowing from friends and families. Also, explore other ways to borrow from life insurance. Irrespective of your choice, always have an emergency fund and other measures that can help you in a financial emergency.
