
Having an emergency fund is important for handling unexpected expenses gracefully. However, saving enough money for a useful emergency fund takes time, especially when you have mouths to feed and a family to care for. And if you just lost your job or have to get your car repaired, you need a solution, and you need it now.
Check out these financial solutions for families that could make things easier for you.
Loan from a friend or family member
If you only need a small amount of money, you might have a friend or a family member who would happily lend it to you. But if you decide to opt for this short-term financial solution, proceed with caution. If you take too long to repay the borrowed money, you could risk damaging your relationship with the person who generously loaned it.
So, you should only borrow money from a friend or family member if you’re sure you’ll be able to repay them quickly.
Personal loan
No matter the financial strain your family is dealing with, you could solve your issues by applying for a personal loan. A personal loan is a loan you can use to consolidate your debt, to pay for home renovations, or to face unexpected expenses. You can get one from a bank, a credit union, or an online lender.
Personal loans can be secured and require collateral, or they can be unsecured. It could take some time for you to get approved for a loan, but once you do, you’ll receive a lump sum of money you can use to cover various expenses.
Payday loan
Payday loans are short-term loans that allow you to cover your expenses until your next payday. You apply for payday loans online and get approved within a day. You will then receive money in your bank account.
Remember that payday loans usually have high interest rates, and you’ll have to pay them back as soon as you receive your next paycheck. It’s a short-term financial solution, but it could be the one that meets your needs.
Installment loan
Installment loans include personal, student, auto, and mortgage loans. They can be secured or unsecured and generally have lower interest rates than other short-term loans.
An installment loan allows you to finance a big purchase quickly. You then need to repay it with regularly scheduled payments, which will include interest, of course. Applying for an installment loan could be a great way to cover your family’s expenses.
Line of credit
You could open a line of credit, which allows you to borrow money anytime you need to. You can borrow as much or as little as you need, and although you’ll have to make monthly payments, you can pay the full amount back whenever you want.
For that reason, a line of credit can be a great short-term financial solution for your family. The interests of a line of credit can vary, but they are generally lower than those you would pay on a personal or payday loan.
Title loan
Getting loan approval might take time if you have a low credit score. But a title loan could be the right solution for you. A title loan is a short-term loan that uses your car as collateral. You can’t get one from a bank or credit union, but many online lenders can offer one, and you can get approved quickly.
Remember that when you get a title loan, you use your car to guarantee you’ll pay it back. You could lose your car if you can’t repay your loan.
Home equity loan
Finally, if you own a home, you could borrow money with a home equity loan. This loan is secured against your home equity and allows you to receive a one-time lump sum payment. A home equity loan can be a good short-term financial solution, but only apply if you can manage your fixed payments.
Hopefully, one of these short-term financial solutions for families can solve your issues. When you get back on your feet and finish repaying the borrowed money, keep putting money aside for your emergency fund each month. Next time you face unexpected expenses or financial strain, you might have more than enough money to keep you afloat.