A loan is a great way to quickly handle an emergency, but we will be the first to tell you that they come with fees and interest that can quickly add up. If you have less than perfect credit, it could add up to a lot.
Because of this, you owe it to yourself to explore other options for handling your money issues. We can help with that.
Take a look at a few other ways to handle your money problems.
1. Cut Your Bills
If you give it a shot, you might be surprised at just how many of your bills that you can cut. Every dollar that you save on your regular monthly bills is a dollar that you can use to handle your current money issue. Before you commit to a loan, give all of your bills a once over.
Utilities
You have got to keep paying the utilities. You, after all, need water, electricity and you need your phone. Having said that, you may be able to make some cuts.
If it is offered, you might be able to switch to an equal payment program with your utility. This would allow you to pay one average payment over the course of a year, eliminating those seasonal spikes.
In addition to payment plans, free grants may be available to help pay for your utility bills. Eligibility is usually dependent on income and availability will vary from area to area. Contact your utility or service providers directly to ask about available programs. You can also investigate the Help With Bills page from USA.GOV to see if there are other programs that you may be able to qualify for.
Loan Payments
If you have an installment loan and are in good standing, a deferment may be an option for you. These are a fairly common thing, especially with auto finance companies.
With a deferment, your lender is essentially taking a payment and placing it at the end of your loan. If you defer one month of payments, you will be extending your loan a month. Keep in mind that deferring the payment doesn’t stop the interest, it will continue to accrue.
If you would like to ask your lender to defer a payment, visit your account online and see if there is an option to do so. If not, call them directly and ask. If you are in good standing, they will likely work with you.
Other Bills
Besides the bills above, there are probably other bills that you can cut. Things that are luxuries and you can do without.
The biggest example is a cable bill. If you are still paying for cable or satellite, now might be the time to cut it out. That 100 to 200 dollars a month can be put to a better use and it can be easily replaced by a cheap or even a free streaming service.
Other examples of bills that you can eliminate include things like gym memberships, digital subscriptions and your food bill. Your food bill will yield particularly high savings.
If you eat lunch out every day, switch to bringing your lunch. If you have food delivered for dinner or buy expensive pre-made meals, learn to cook. You cn save hundreds of dollars a month by spending wisely on food.
2. Sell Something
You might have more to sell than you might think. Take a walk around your home and see what is cluttering it up. Look for things that you have not used for 6 months or more and consider letting them go to solve your money problems.
Once you have your items, you have many venues that you can use to sell them. Take a look.
Garage Sale
The classic garage sale never fails to attract attention if you have enough to sell. It can easily generate several hundred dollars in a matter of hours.
If planning a garage sale, your first step should be checking with your city and/or HOA. Restrictions might be in place that limit or prevent garage sales. You also may need to get a permit.
On the day of the sale, be sure to do one thing, provide plenty of signage. People need to find you in order to give you their money. Put signs at the entrance of your neighborhood and along the route to your home. Every turn along the way should have a sign.
Another tip is to put the larger items in the back. That forces people to have to walk through all of the small stuff and hopefully find something hey like along the way.
Local Online Markets
If you do not have as many items to sell or just do not want to deal with people coming to your home, an online marketplace like Facebook Marketplace or Craigslist is the thing for you. Facebook is my personal preference, but both will get the job done.
When selling on a website such as the ones above, caution must be used. Be careful to only accept cash, only deal in persona and always choose a very public location to meet. Try to avoid meeting at your home and try to avoid meeting at night.
There are a lot of online scammers out there on these websites, so be careful.
National Online Markets
This means one thing to most and that is eBay. This is a great way to sell property for top dollar and you do not even have to wait the full time for an auction. Buy It Now listings work very well if you are willing to accept a little less than what an auction would have produced.
I use the term National Market because I would recommend that if you are selling in the US, you only accept buyers from the US. It will make the shipping and sales process much easier. If someone from outside the states wants to buy your item, they can always go through a third party service to get it.
The good thing about eBay to sell is that you reach a huge audience. If you price things well, this will allow you to make the sale quick. Then you can specify that payment must be made immediately to Paypal. Paypal in turn works well because they have an instant deposit feature that will allow you to get your money immediately. Hard to beat.
3. Friends & Family
Last, but certainly not least, you have loans from a friend or family member.
This can be tricky, but if you pull it off, you will have loan without fees or interest and that is something that you should always consider.
To successfully pull off a loan from a friend or family member, the key is documentation.It might seem impersonal but it is a must.
Think about how many times you remembered something wrong. It has probably happened a lot and you were probably so sure that you were right. Now, imagine what happens when that friend remembers loaning you more money than they actually did. It could be an honest mistake but it would cause big problems.
When taking out a loan, get a signed loan statement made. Nothing fancy is needed, just list the amount borrowed, the amount to be repaid and when you will pay it back. Both parties should sign it and get a copy.
When it is time to pay back the loan, cash is a big no no. Write a check, get a money order or send it electronically. That way you will have proof that the money was paid back.