Planning Ahead: Short on Cash and Heavy in Need is not a Great Place to be


Ask anyone what their worst-case financial scenario is, and the answer will be pretty universal: running out of money.

Without money, we risk losing our cars, our homes, our possessions, and our shelter and safety—the very tenets we require to be healthy and happy.

While the idea is worrying, it’s important to understand that it can happen and to have a plan in place for if it does. To make sure you’re always on the safe side of your money, here are some suggestions we have for how to deal with a money emergency.


Get an unsecured line of credit

An unsecured line of credit allows you to borrow money up until a certain set limit, but you don’t have to touch the loan until its needed and you only have to pay back the amount you’ve borrowed.

An unsecured line of credit means that your bank or financial institution is lending you the money without an asset to secure the risk, such as your home or your car.

For most, unsecured lines of credit come with low-interest rates, no fees, and are quick and easy to set up.

The downside? Minimum payments on lines of credit interest only, which means your debt will be permanent if you don’t have enough money to pay down more than the minimums.


Home Equity Line of Credit

If you’re a homeowner, you may have access to a Home Equity Line of Credit or HELOC. These are secured lines of debt that use your house as collateral, and therefore often have considerably lower interest rates.

Not only do HELOCs offer low interest, they also permit you to borrow large sums of money, sometimes right up to the amount of equity you have invested in a home, which makes them a popular choice for homeowners.

The downside? You do need to be a homeowner to qualify for one and HELOCs pose much of the same risks that unsecured lines of credit do. HELOCs also have a particularly bad rep when it comes to debt consolidation.

Homeowners who may choose to consolidate high-interest credit cards into one low-interest HELOC may end up using the line of credit the same way they would a credit card, which is a bad move.

A HELOC is something that’s best to consider when you’re getting a mortgage or re-mortgaging since there is often closing costs associated with setting one up.


Alternative Lenders

Alternative lenders are an option for those with subpar credit scores who need cash in a hurry. Alternative lenders like King of Kash can provide people with quick, easy ways to access cash for a person of family emergency without the hassle of applications and credit score checks.

That being said, many alternative lenders will have much higher interest rates than anything you would see at a bank or in a traditional loan, which means that these loans are best for those who may have lower credit scores but still have the means to pay the loan back quickly before it accrues interest.

So what are you doing to prepare and plan financially for your future?

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