Hello World! Welcome Friends! As the country faces economic uncertainties, recession and rapid inflation, many citizens are struggling to make ends meet. Moreover, times like these can also make it more difficult to deal with personal and financial emergencies.
That’s why to help you manage your money better and deal with financial emergencies effectively, we bring you this article.
Today, we’ll discuss 3 financial solutions that can help you manage your urgent cash needs and also help you plan your finances better.
Let’s get started!
How to Deal with Liquidity Issues
We’ve all been in a situation towards maybe the end of a month where liquidity seems scarce. What’s worse is when sudden emergency expenses come out of the woodwork. The situation becomes difficult and you have to turn to your credit cards. However, what happens when your cards are maxed out and the bill is overdue?
How do you manage the cash crunch in case of an emergency like a car breaking down or urgent home repairs? In such pressing situations, you certainly can’t wait until the next payday.
So What Are Your Options?
Take an Advance from Your Employer
Taking an advance from your workplace is one way to go about it. It would be like borrowing from a friend, only that it will be like a loan from your employer. Again this is purely subject to how kind and generous your boss is.
Take a Personal Loan from Your Bank
The bank is the official and traditional destination to turn to when you need a loan. A bunch of paperwork reading, official documents signing and a really long process later, you can welcome your loan amount with both arms.
The word loan itself evokes a feeling of dread and uncertainty. Dread from the interest rates charged and the fixed repayment schedules. And uncertainty from the lack of confidence in whether you will be able to repay the loan on time.
What’s even more concerning is in case you default on interest payments. Now, how will it impact your credit score?
Moreover, this option may not always be accessible, especially if you have a low credit score.
Also, what if you are not looking for a considerable amount? What if you need some cash as a stop-gap only till the next paycheck arrives?
Take a Payday Loan
If you need urgent emergency money between paychecks and have a mountain of debt to deal with, then why not consider taking a payday loan to make your life easier?
What Are Payday Loans?
Simply put, payday loans are cash advances to aid you in times of urgency and unexpected expenses. It is not offered by the traditional bank but by a direct lender.
Usually, these loans have short terms and are due until the borrower’s next payday. Some payday loan lenders offer a little more flexible repayment schedules extending to 12 to 18 months as well.
However, there are some basic prerequisites when it comes to opting for a payday loan.
- You need to be at least 18 years of age
- You must have a regular and steady source of income
Some payday loan lenders also put in some extra safety measures to counter the negative reputation that payday loans have.
- You must have worked with your employer for at least 6 months
- You need to earn more than £1,400 every month
Flexibility is perhaps the best part of payday loan lenders. Banks and traditional financial institutions heavily rely on your credit score before approving a loan.
Many payday loan lending companies in the UK offer you a loan even if you have a low credit score, subject to their terms and conditions. By considering other affordability factors, over credit score, they ensure you get the most suitable loan for you.
If you fulfill this criteria, you can be well on your way to applying for a payday loan. Once all the approvals are in place, the payday loan amount can quickly reach your bank account, in as quick as three hours!
How to Never Be Strapped for Cash
While loans are great to bail you out, taking them every time may not be the best option. If you often find yourself borrowing to deal with your financial expenses, it is crucial to find a solution to this as soon as possible.
Don’t worry and overthink, but resolve to take remedial action. It may seem like a daunting task, but all you have to do is trust yourself and the process to break the cycle.
Initially, the only two solutions you may have is to reduce your expenses or increase your income or both. To achieve this, you need to first create a budget that lists all of your income and expenses.
Then you can work on cutting down unnecessary expenses while looking for new passive income sources. This can be something as simple as starting a side hustle or getting paid to become a mentor.
You can also read various personal finance magazines and checklists to ensure your finances get back on track. Seek the guidance of a friend or family member who always has their finances in order.
Taking these small but incremental steps for the long haul ensures you don’t face a cash crunch in the future.
To Sum Up
No bells and whistles are ringing when your personal finances are in the red. However, a nagging feeling does persist when the debts are high and the income is low. One of the ways to avoid being in such an icky situation is to create an emergency fund. In addition to that, pay all of your bills on time and seek guidance when required.
The next time you are low on finances, remember the above options to make an informed decision. Payday loans, employer advance or bank loans, whatever option you choose, choose carefully.
Keep in mind, for any and every financial decision, you need to get into the nitty-gritty. Ensure you do the required research, compare rates, understand repayment terms and go through customer reviews and feedback.
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