The average American has a combination of debt. If you are struggling, you may be looking into emergency cash to stay out of debt.
If you need emergency cash to stay out of debt, and your emergency fund/savings account doesn’t cut it, there are several options that you can consider. Below is everything you need to know when looking for emergency cash to stay out of debt.
A Few Strategies of Getting Emergency Cash to Stay out of Debt
If you are just starting off with your finances, and don’t have a lot or any debt, if you do face an emergency then there are a few alternatives to using a loan or a credit card. Here are a few options you can consider for making some extra money:
- Monetize a Skill or Hobby many people have skills or hobbies that they can monetize. From something as simple as setting up a platform to posting on your social media about the services or goods that you have available could mean extra cash without having to use credit.
- Borrow from Friends and Family an option to consider is borrowing from friends or family. Although technically this is debt, it is definitely different than going to a financial institution. Most times with friends and family you’ll get more flexibility, and in most cases, there isn’t any interest in borrowing.
- Sell Some Stuff another way to get some quick cash, is to sell some stuff. Most people have things of value that they may not need and could sell. Depending on the demand, and the item, this could mean fast cash!
- Get a Side Job there are all kinds of side jobs, out there, like driving, or food delivery. They are one way that almost anyone, with a vehicle, can make some extra cash.
- Use Your Emergency Fund if you have an emergency savings account, think about using it, even if it may not seem like a huge emergency. Getting into debt when you don’t have can save you tons of money down the line.
When You Cannot Avoid Going into Debt to Get Emergency Cash
In some cases, you may find it impossible to get the cash you need without having to borrow the funds, in that scenario, there are strategies that work best:
The First Thing to Do, is To Figure Out How Much Debt That You Have to Pay Off
To get a whole picture of how much debt you have to make sure you know exactly how much you owe, and it may be helpful to know the interest rates that come with it. By doing this you can set yourself up for a smoother financial journey. At this point, you may also want to consider a budget if you don’t have one already.
Emergency Cash from Debt Consolidation
Debt consolidation is when a larger loan/debt with lower interest and better financing options is taken out and used to pay off any remaining smaller debts. This can work for those who have a good credit score or for those who have access to secured loans. Before choosing this option, it is best to do thorough research. In some cases, consolidation can save money, and provide additional funds.
Consider Refinancing with Another Kind of Loan for Emergency Cash
Another option to consider, which is similar to debt consolidation in that it could provide additional funds but works better for a single piece of debt/loan/line of credit. Here are a few loan types you can consider when considering refinancing options:
- Personal Loans personal loans can be used for a variety of different expenses, and come in all kinds of amounts, along with repayment terms. Keep in mind that for unsecured personal loans, credit will play a huge role with eligibility. Along with that, personal loans can sometimes take a few weeks (1 2) for their funding process.
- Home Equity Loans home equity loans use the value of a borrower’s home to make funding available. Keep in mind that these can have a longer process than most of the other loans as a house inspection may be required.
- Credit Cards credit cards are another form of lending that can be used for a variety of reasons. Like personal loans, eligibility will be based on the applicant’s credit. Keep in mind that the average process for credit cards takes about a week.
- Title Loans title loans are a type of loan that is secured with the borrower’s vehicle. These loans are one of the fastest loans out there, one reason for this is their eligibility requirements which are flexible. Keep in mind that they do come with higher interest rates, and so it is important to find the right lender.
- Payday Loans payday loans are secured by the borrower’s paycheck, the amount that a payday loan can make available is usually a couple of hundred dollars, so if your debt is far more than that, consider another option.
Emergency Cash Through a Balance Transfer Card
This method of managing credit works simply: it involves transferring debt into one credit card that carries low interest rates and low balance transfer fees. The best candidates for balance transfer credit cards are those who already have good financial habits, a good credit score, and don’t have a large amount of debt in relation to their income.
Different Long Term and Short Term Solutions to Stay Out of Debt
Once you figure out how to manage your debt, it is important to maintain it so you can reach your financial goals, stay debt free, and be able to get a good handle on your personal finances. Along with continuing budgeting, there are a few solutions for those who want to maintain debt management:
Keeping Months’ Worth of Savings
To stay out of debt, it is important to keep savings for any unexpected expense, or situations that can come up like medical care, or job loss, or for another rainy day. This is so you don’t have to lean to a credit card or a loan if something comes up. A savings of three to six months of income is recommended to keep people out of debt.
Look into Professional Financial Help
Many people turn to financial coaching/a financial planner when they need some help with their finances. Financial coaches help people analyze, organize, and optimize their monthly expenses. Here are a few things they help with:
- Show their clients to understand their credit report
- Help clients with balancing their living expenses
- They can also help a person with their individual long term and short term financial goals.
Avoid opening Excessive Lines of Credit or Taking Out Additional Loans
Once your debt is managed it may increase a person’s ability to be eligible for even more credit card lines or loans. However, it is best to avoid this temptation as it can bring a person right back to square one.
Use Your Credit Cards As ‘Debit’
This is a good way to maintain management over debt. The day or week a credit card is used use your debit card to pay off the balance. People do this to get the most rewards/cashback on expenses that they were going to use their debit cards for anyways. This also helps from spending within a budget.
Making Extra Payments Each Month On top of the Minimum Payments
This is a fairly easy part of managing credit card debt or loan debt. Because of the high interest rates and finance charges can be high paying just the minimum doesn’t do much in eliminating debt. So even if it’s a couple of extra dollars more than the amount due, it can make a huge difference in the time it takes to pay off those interest charges, and principal amount.
Tackling the Largest Loan or the Highest Interest Rate Loan First
This is a technique that many people use to eliminate debt. What this involves is allocating extra income to pay off the larger debt, or the highest interest rate first and then moving on to smaller debts. For many people, after a period of time, this creates a snowball effect and can make the debt more manageable.
Contact Max Cash Title Loans Today
If you need emergency cash to stay out of debt, especially during the pandemic that has an impact on the financial lives of many, you may not be sure where to start. There are many things you can do when you need emergency cash but don’t want to add to your debt amount.
If you do need to take out a credit card, or a loan, then there are options that won’t derail your finances. There are many strategies that can make your debt more manageable with both the interest rates and monthly payments.
If you are thinking of a title loan, start with Max Cash Title Loans! We make the lending process simple, fast, and convenient.2 To apply right away head to our website and begin the online title loan process, or give us a call at 1 855 561 5626.
Once you are out of debt it will be important to follow some simple tips to keep yourself debt free and have peace of mind.