Here’s how to effectively handle an emergency expense and prevent it from throwing you off-course.
A leaky roof. A sick pet. A last-minute trip. Unexpected expenses are inevitable but figuring out how to cover them can sometimes feel like an insurmountable challenge.
In fact, one in four Americans don’t have any money saved for emergencies. ¹
However, by carefully evaluating your options, you can help prevent an unexpected expense from throwing you off course.
First, consider some alternatives. Can you cover the expense by cutting back elsewhere in your budget? Is borrowing money from a friend or family member an option? Or do you have any assets you’ve been meaning to turn into cash, like an old smartphone or laptop?
If none of those options are realistic, using a credit card may seem like the best alternative — but that might not be true.
Not only do most credit cards carry high interest rates, but a significant expense could increase your credit utilization ratio, which is the amount you owe compared with your available credit. That can have a negative impact on your credit score. And, credit card debt can snowball fast, potentially turning an unexpected expense into long-term debt that weighs you down.
Depending on your circumstances, a personal loan may be a better alternative. Personal loans are installment loans, meaning you’ll have a predictable repayment schedule with a set payoff date. Your debt utilization ratio won’t be impacted, and you may be able to secure a lower interest rate than your credit card.
Many online lenders will allow you to check your rate options before applying for a loan with no impact to your credit score, making it easy for you to evaluate your options. Also, most online lenders offer fast decisions and quick funding. Once approved, the funds could be in your account within one business day.
When you’re hit with a money emergency, you probably need to track down funds fast. But taking a little time to evaluate your options can make a huge difference in making sure you’re making the right long-term decision.
See what the possibilities are with no obligation or impact to your credit score. Check your loan options now.
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* Applications submitted on this website may be funded by one of several lenders, including: FinWise Bank, a Utah-chartered bank, Member FDIC; Coastal Community Bank, Member FDIC; Midland States Bank, Member FDIC; and LendingPoint, a licensed lender in certain states. Loan approval is not guaranteed. Actual loan offers and loan amounts, terms and annual percentage rates ("APR") may vary based upon LendingPoint's proprietary scoring and underwriting system's review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 8% may apply depending upon your state of residence. Upon final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. Loans are offered from $2,000 to $36,500, at rates ranging from 7.99% to 35.99% APR, with terms from 24 to 72 months. Minimum loan amounts apply in Georgia, $3,500; Colorado, $3,001; and Hawaii, $2,000. For a well-qualified customer, a $10,000 loan for a period of 48 months with an APR of 24.90% and origination fee of 8% will have a payment of $331.01 per month. (Actual terms and rate depend on credit history, income, and other factors.) Customers may have the option to deduct the origination fee from the disbursed loan amount if desired. If the origination fee is added to the financed amount, interest is charged on the full principal amount. The total amount due is the total amount of the loan you will have paid after you have made all payments as scheduled.
* Applications submitted may be funded by one of several lenders including First Electronics Bank, a Utah-chartered bank, Member FDIC; Coastal Community Bank, Member FDIC; and LendingPoint, a licensed lender in certain states. Loan approval is not guaranteed. Minimum loan amounts apply in Georgia, $3,500; Colorado, $3,001; and Hawaii, $1,500. Upon final underwriting approval to fund a loan, said funds are often available the next non-holiday business day. Actual loan offers and loan amounts, terms and annual percentage rates (“APR”) may vary. Loans are offered from $500 to $10,000 (loan amount maximum based on MCC codes), at rates ranging from 7.99% to 35.99% APR, with terms from 24 to 48 months. For example, for a well-qualified customer, a $5,000 purchase will have a 90-day promotional period with no interest, a 3% fee, and $100 monthly payments. After the promotional period, a remaining balance will be a 24-month term loan, and $263.72 monthly payments with an overall APR of 26.54%.
**Minimum initial transaction of $1,000 in Alabama, Idaho and Iowa.
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