Almost everyone finds themselves nearing the end of the month; cash flow is strained, and an emergency hits. There isn’t enough money to pay the bills, let alone being able to pay for the emergency expense. What do you do?
Since the unexpected expense can’t be postponed, many people will turn to friends, family, and others to a third-party lender to obtain the money needed to handle the expense.
Must Pay Unexpected Expense
Many people will go to a local payday loan store to obtain the cash. There is no doubt that using a payday loan is probably the quickest way to get the money for an emergency. But, you really need to know and understand the pitfalls of using this type of loan. Statistics show that this kind of lending generally leads to worse financial problems and drives you even deeper into debt.
Knowing both the pros and the cons is essential to making the best choice. And most importantly, you must read the fine print before signing the loan documents. This kind of loan can be very risky and expensive, especially if you can’t pay the loan back on time or at all.
Need Good Information to Make Best Choice
We at LifeCrafter, are working on a course that we published a few years ago to update it to be relevant and current for today’s economy. But, until that course is ready, here are some questions to consider today, should you be faced with an unplanned financial emergency.
Would you please ask yourself the following questions?
- Do you really need the money?
- How much money do you need?
- Can you afford it?
- What are the risks?
- Will it affect your credit score?
- Understand the terms and conditions
- Are there any alternatives?
There Are Alternatives to Consider
Finally, suppose you don’t feel comfortable getting a cash advance. In that case, you should look for any alternatives at your disposal. At the beginning of this post, we suggested that you ask a friend or family member to borrow some money. This type of loan is private and has the advantage of no or interest rate, and it cannot affect your credit score.
Other options include using your credit card, apply for an installment or a personal loan at a bank or credit union. Another option is to ask your boss or supervisor for an advance on your next paycheck. So take some time to think about your situation, there are always alternative and cheaper ways to find the money you need.
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