Sooner or later, everyone runs into financial trouble. How you get yourself out of it is a different story. Your solution depends on a lot of factors. Is it a personal issue or a problem with your business? Do you need ongoing help or just a momentary boost to cover an unforeseen expense?
You’ll have to look at every angle of your unique financial emergency to make the right decision for you, but here are some universal things everyone should consider.
Nowadays, there are plenty of borrowing options. All you have to do is punch in a few keywords into your next Google search, and the search engine will spit out millions of results in a few milliseconds.
But once you start investigating, you’ll notice these results aren’t available for everyone — even if anyone can click on their links. To be approved for the majority of bank loans, you need to have prime credit.
If you don’t have that, tweak your search for installment loans for bad credit. While a lender like MoneyKey may check your credit, it isn’t the only factor they consider when reviewing your application, so you may apply for installment loans at MoneyKey even with a low score.
In many ways, bad credit installment loans work like other personal loans; you’ll receive your funds in one lump sum, and you’ll have multiple weeks or even months to repay what you owe, plus interest. One of the only differences is that this interest tends to be higher.
Sadly, no business or personal loan is free. Whether you borrow from a P2P app or online direct lender, these lending services will apply interest and other charges.
Interest rates and other fees may vary greatly from lender to lender. They may also reflect your creditworthiness. People with high credit scores tend to qualify for the lowest rates, while consumers with low credit often pay higher fees.
Pay close attention to these details of your arrangement; these charges may add on a significant chunk of change to your principle that you’ll have to pay back.
Don’t agree to anything you can’t fit into your budget, no matter how desperate you might be.
Eventually, all your hard work shopping around will pay off, and you’ll find a cash loan that fits your needs. But even the best cash loan doesn’t compare to a robust emergency fund.
While a bad credit installment loan may help out in an emergency, it shouldn’t become your go-to solution to every financial problem. This is a costly way to handle rough patches and unexpected expenses, as you’ll always be putting money towards interest.
Meanwhile, withdrawals from your emergency fund are free, so focus on what you need to do to squirrel away more in savings. Financial stability is only possible once you start thinking about how you’ll handle unforeseen expenses — business or otherwise.
No matter what you end up using as a crutch in your emergency, make sure you think this through your decision thoroughly.
These three things are just the start of your decision-making process. Weigh the pros and cons of any option before you lock in to ensure you find the best fit for your needs. Skip this, and all your efforts to patch your budget may fall flat.