No matter how carefully people plan their lives, certain aspects of it are out of their control. Faithful employees can lose their job, the most health conscious people can have a sudden and severe illness or accident, and the economy can take a downward turn, making it hard to meet everyday expenses. Ideally, savings can help people get through hard times, but savings can run out, and then what? The following are some tips for dealing with financial emergencies from Blue Trust Loans.
Negotiate With Creditors
First of all, don’t be afraid to try to negotiate with creditors. Often a company is willing to offer extensions on payment due dates or even reduced penalties because it is in the creditor’s to get their money back. The best time to make a phone call is before the bill is overdue, and that is especially true for mortgage lenders. However, it’s not too late to try even after a warning letter has come in the mail.
Borrow From A 401K
One place to turn for cash is a 401K or other retirement plan. There are several ways to get money out of a 401K. One is to take out a loan from the account, and it may be possible to do this without paying a penalty or even owing taxes on the money as long as it is repaid. Another option is to request a hardship withdrawal or premature distribution. Getting money before the age of 59 will incur a penalty, however.
Borrow From Friends And Family
If borrowing from a 401K is not an option, consider borrowing from friends or family members. There is a tendency to treat such loans as gifts, and that can really damage a relationship in the long run. If borrowing from a friend or relative, put the terms of the loan in writing, including a payment schedule and interest, and then stick to that schedule.
Take Out A Short-Term Installment Loan
When other options don’t work out, a short-term installment loan is a good way to get quick cash. While these loans tend to have a high interest rate, it is very easy to qualify for one, and the cash is usually available the next business day.