When you have a problem financially and need money to get yourself back on your feet, there are several options open to you. Some of them you may not have heard of, while others you may be aware of. Deciding which options are best for you depend upon your particular financial situation as well as your job, collateral, and credit rating.
Get An Unsecured Short-Term Loan – These types of loans go by various names depending upon the area you live and the laws within the state you reside, but they have several things in common. One is that they require no collateral or a good credit rating.
When the payment becomes due, it is often taken in, in one lump sum. The payment is made by taking the money directly from your bank account, or by cashing a post dated check you have given to the lender. The interest rates tend to be high, and the length of the loan can be measured in days or weeks.
They are good for those without any resources to offer as security and have poor credit ratings. Your asset, in this situation, is a steady job to pay back the loan.
Get A Business Loan – If you are self-employed and can verify that you do approximately $2,500 or more in credit card transactions, you can get an unsecured loan. There are lenders who will provide money to a business owner and take a small amount of each credit card transaction as payment.
These loans are great for a business owner, because payment is automatic and the greater your sales, the quicker the loan is paid back. Of course, this only applies to a person whose small business is the reason for financial hardship, but there is a strong relationship between a person’s business and their personal finances.
Get A Consolidated Loan – You will need to have a fair or better credit rating and a steady job, but you can usually consolidate all of your debts with a single personal loan. This type of loan is usually offered by finance companies, and they charge higher interest rates than banks and credit unions.
However, they offer closed end loans. These loans will be for a specific number of payments and then the loan is paid off. This is much different from a credit card that continues to pile on interest each month and will take years to pay off. The single payment on a consolidated loan will usually be less than all of the minimum payments for your credit cards.
Get A Title Loan – If you own a car and have the title, this is a perfect loan to get the money you need. Your credit is not an issue and the interest rates are low because your car is collateral for the loan. What makes this a great loan is that you only leave the title as security. You get to keep the car in your possession to drive to work and anywhere else you normally would.
Use Your Retirement Account – In certain situations, it is possible to use your pension plan as collateral for a loan. There are a great many restrictions on doing this. For example, you will need to be fully vested with payment disbursements beginning in the next five years. If this is your only asset, it may be worth looking into with a local lender.
Use Your Life Insurance Policy – As a final suggestion you may want to consider your life insurance policy. If you have a whole life or universal policy you may be able to pull money out of these policies to help you out. However like the last option their may be some restrictions before you can do this.
Another option is to cash out your permanent policy and switch to something like a 30 year term life policy like I did. This allowed me to get the money I needed and still keep the coverage I needed as well. You can learn more about how I did that here.
There are many reasons that a person can get knocked down financially, but the important thing to keep in mind is that there are options available to you. There are ways to get the relief you need to start back on the road to financial recovery.
What options have you considered to back on your feet financially?