When you’re unexpectedly laid off from your job, or an unplanned bill arrives, your regular monthly expenses don’t go away. You still need to pay for basic things like food, rent, and utilities just to survive. If you suddenly find yourself in a situation where money is tight, here are four places you can turn to so you can get the funding you need.
An installment loan is a short-term loan where the borrower repays the lender over monthly installments (typically with a fixed rate of interest). Repayment terms can last anywhere from a few months to a few years. Installment loans typically offer a larger sum of money, such as several hundred or thousand dollars. So, these loans can work well for borrowers that need money to cover larger bills.
Some installment loans have less strict credit score requirements. With these loans, lenders will consider factors in addition to your credit score, such as your income and employment history. This means borrowers with poor or fair credit may still get approved.
Lines of credit
A line of credit is a flexible type of loan that allows you to access funds up to a pre-defined amount of money any time you wish. The borrower is free to use as much or as little of this credit line as needed, and they will only have to pay interest on the amounts that they borrow.
This type of loan can be helpful for people who have variable expenses and are unsure how much they’ll need to borrow at a time. If they can keep the withdrawals to a minimum, then their interest payments will be much smaller than if they had taken out a personal loan and borrowed a lump sum.
A title loan is a secured, short-term loan that lets borrowers use the title of their vehicle as collateral. After you fill out an application, the lender will appraise your vehicle and may offer you a loan amount worth 25 to 50% of its value.
If approved for a title loan, you can continue driving your vehicle as you repay the loan. But keep in mind that if you default on the loan, you’ll risk losing ownership of the vehicle. These loans can work well for borrowers that need to pay bills and are willing to use their car as collateral.
A payday loan is a small loan that can help cover any essential or emergency bills before you get paid. With this type of loan, borrowers can typically receive a few hundred dollars. Then, they can pay back what they owe when they receive their paycheck in two to four weeks. Better yet, lenders may not require borrowers to have good credit to get approved. A payday loan can come in handy for borrowers that have to cover smaller bills.
The bottom line
When your monthly bills are due and money is tight, they don’t have to go unpaid. You’ve got plenty of loan options you can utilize to get the funding you need. Borrowers can take advantage of installment loans, lines of credit, title loans, or payday loans for temporary financial relief.