What To Do When You’re in a Financial Bind
Despite your best efforts to practice good financial management, sometimes money can get tight. Perhaps there’s an emergency, or a large medical bill unexpectedly arrives in the mail. Regardless of the reason, you may find yourself needing immediate financial assistance.
From credit cards to payday loans, there are many ways that borrowers with all types of credit backgrounds can get the funding they need. Here are four options for you to explore:
Use your credit card
If you’ve already got a credit card with a decent credit limit, then this can be a great place to find temporary relief. Since many major credit cards have grace periods that can last anywhere between a few weeks and over a month, that essentially makes them an interest-free loan. You can charge the expense and then take the next few weeks to decide how you will pay it off.
Of course, the risk to this option is if the balance never gets paid off. When unpaid balances carry over into the next credit card cycle, it becomes part of what’s called the revolving balance. Revolving balances are charged a daily rate of interest that builds not only on top of the amount you charged but also all previous interest charges. The longer this balance goes unpaid, the more interest that will be charged, which can drive the cardholder further into debt.
Apply for an installment loan
An installment loan is a loan that gives you a lump sum of money. You can agree to pay back what you owe in monthly installments over the next couple of months or years.
Although mortgages and auto loans are technically installment loans, many applicants who are in a financial bind will want what’s called a personal loan. Personal loans generally come in two types: secured and unsecured. Secured personal loans require collateral, or something of value like your home or vehicle, in case you default. Unsecured personal loans don’t require collateral, but will typically only loan limited amounts and may have higher qualification standards.
Installment loans typically have reasonable, fixed interest rates. This makes them convenient for the borrower because the payment amounts are consistent.
Consider a payday loan
If you’re in a financial bind in between paychecks, you can consider getting a payday loan. This type of fast cash, small dollar loan typically comes with an easy application process that you can complete online from the comfort of your home. Additionally, many lenders offer an instant approval decision and same-day funding, meaning you don’t have to wait days or weeks to receive the funds you need. Payday loans can be a great option for those who need a few hundred dollars to cover expenses before their next payday.
Ask for help from friends and family
If you’re truly in a bind and have nowhere else to turn, you could reach out for help from your family and friends. Some may be willing to give you a short-term loan as long as you wholeheartedly agree to pay them back. If you do ever borrow money from a loved one, be sure not to miss a payment. Otherwise, it could have significant personal consequences.
Get the funding you need
When money is tight, you don’t have to let your bills go unpaid. There are plenty of ways you can get the money you need. Consider using your credit card, getting an installment loan, getting a payday loan, or borrowing from family and friends. And whichever option you choose, make sure you have a repayment plan in place beforehand.
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