Life’s little emergencies can often set a family or business behind the eight ball with seemingly no options but bankruptcy or high interest short term loans. Yet there are lots of different options depending on the need of the emergency. The first and foremost thing you need to do is stop any borrowing transaction and look at alternatives first. Short term loans look great until you have to pay back 200% of what you borrowed, doubling the cost of your emergency.
Have you fallen behind on a major bill that you need to live comfortably? This may include utilities or energy bills, or even a credit card. If you have, do not go out and get a costly short term loan. Remember, most of these bills are regulated to ensure that you can afford the payments. If you are behind on utility or credit card payments; you need to contact the companies and work out an affordable repayment plan that works with you budget while at the same time keeping the lights on or the credit intact.
For utilities especially there are many local, state and federal programs designed to help those people facing the threat of them being shut off; especially during cold winter months. These programs are often need based grants that get you back on your feet without any repayment necessary.
You Need to Eat
If your financial emergency is forcing you to forgo groceries and feed your family there are food stamp programs and food banks that may be available to you. Ensure that your family is well taken care of by leaning on these organizations while you are in need.
An Essential Appliance
Trying to live without a stove or fridge is almost impossible today. Luckily there are tons of local and government programs and organizations that can help you out. From local charities, regional furniture banks to online classifieds that offer free furniture there is sure to be a solution to your emergency to avoid high interest short term loans. In Australia there are even Centrelink loan options or advances on benefit payments to help low income earners avoid borrowing and getting into or further into debt.
As a student; if you are facing the possibility of quitting school because you cannot continue to pay for your tuition there are usually state or federal programs that can ensure you finish your education. From grants to long term student loans there are options that help you in your personal financial emergency. These are much better alternatives to a pay day loan.
Even if you exhaust all other options, there are ways to borrow that can help you avoid these nefarious interest rates charged by companies that only want large returns. Look for non-profit lenders or government programs that provide loans at rates no more than 15% per annum. These loans are usually quite flexible and offer longer payment terms as well. However, your first stop may also be friends and family for a low interest or interest free loan, just assure to provide the repayment in writing.
Your emergencies most often can wait a day or two, ensure you have the right funding solution before plunging head first into further debilitating debt that will only cause additional hardship.