Most people understand that having an emergency fund, or money saved up for emergencies, is highly important. Although difficult to save up for, an emergency fund can be extremely helpful in the event of an unexpected expense.
What do people use emergency funds for?
People use emergency funds for many different things. They might use them to pay rent, fix a car, help their injured animal, take a trip to the doctor, or other such expenses that come up in life. Emergency funds are also important if you are laid off and haven’t gotten work.
If you’re hit with an unexpected expense and need money, it can be difficult to come up with options, especially if you need that money immediately. There are different options available that many people use if they don’t have an emergency fund available. Here are some of them.
Asking friends and family for money
While asking friends and family for money may have the lowest interest rate, it’s also possibly the most challenging. They might say no, they may also not have the money available to lend, depending on how much it is. Friends and family will also know exactly how much you’ve borrowed before and may use that against you when you ask to borrow money in the future.
Many people turn to these loans for larger expenses when they do not have another option. Loans can range from small amounts to larger amounts; some up to $4,000. These loans are relatively easy to acquire, as you can get personal installment loans online. It’s important when considering an installment loan to read all of the terms and conditions before accepting it. You’ll want to make sure the company is reputable, and you’ll want to ensure that you can fully pay the loan back within the terms. People may also take out these loans to pay for something like a house payment.
Taking out a payday loan
Payday loans can be great – and they can be extremely stressful. In an event where you are sure you will be able to pay off a payday loan during your next paycheck, they may be worthwhile. However, payday loans often come with high interest rates. Some locations have interest rates as high 350%! It’s important to read all of the terms and conditions before you sign that you accept a payday loan so you’re aware of the consequences of the payday loan.
Additionally, payday loans are not available in all states. To date, they have been banned in Arkansas, Arizona, Connecticut, Georgia, Maryland, Massachusetts, New Jersey and New York. They’re also banned in Pennsylvania, Vermont, North Carolina and West Virginia.
Reviewing Loan Options
When you’re getting a loan, even if it’s from a family member or friend, always get it in writing. Make sure that you specify when you’re going to pay it back and how. If possible, it’s ideal to sign up for some sort of automatic bill pay. If that’s not possible, put the event on your calendar to remind you of the dates.
Many people turn to credit cards as an option for their needs. When paid off responsibly, this is an option that is quick and easy. However, many have high interest rates so be careful when using this option.
Saving for the future is a challenge, but important to do. If you do not have a savings fund and need money, these are some potential options to turn too. Make sure to review all terms and conditions of the loan agreement before accepting the loan.a
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