What to do in a Financial Emergency

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Sometimes, life has a habit of kicking us when we’re down, or bringing us a nasty surprise just as we’re starting to feel positive about the future. Unfortunately, on a high number of occasions these kicks and nasty surprises are finance related.

Suddenly, you need to find thousands of dollars that you hadn’t budgeted for. Your dreams of saving up for a once in a lifetime holiday are washed away and replaced with the sudden urgency of needing to pay for something now.

What Financial Emergencies Can Happen to You?

Financial emergencies are varied in their circumstances as well as what they’ll ultimately cost us. Here are seven examples of real finance emergencies that could happen to you.

Financial Emergency #1: Your Pet Gets Sick

Anyone who has a pet values them and loves them; they are members of the family! Therefore, when our pets get sick or they are involved in an accident, we naturally want to do whatever we can to help them get better. If your pet insurance doesn’t cover the full costs of treatment, you will need to find the money from somewhere.

Financial Emergency #2: You Get Sick

Even if you’re the type of person who does everything you can to look after yourself, from being studious with what you eat to taking regular exercise, getting sick is usually something we can’t control. If you get sick or are involved in an accident yourself, there’s going to be medical bills to pay.

Financial Emergency #3: Your Property Needs Repairing

Whether your home is burgled, damaged due to a storm, or something strange happens like a vehicle crashing into it, if you have structural damage to your home, you need to repair it. Often property repairs may be relatively small, such as a leak or a need for a new cooker, but they can be on the larger scale, too. If any of these problems happen to you, how are you paying for them?

Financial Emergency #4: Your Car Is Beyond Repair

Whether due to accident or age, a car beyond repair is a headache we don’t want to have to deal with. Not only is a car the most expensive thing most of us will ever buy with the exception of a house, it’s an essential asset that many of us can’t live without. When the local garage tells you your car is beyond repair, or your vehicle is written off in an accident but is insured for a small amount, you need to think about how you can get back on the road quickly.

Financial Emergency #5: Your Salary is Reduced

Job stability is something everyone values but that, in the real world, they may not have. If your salary is reduced for whatever reason, or even if you are made redundant and have to take another job, you may need to consolidate debts or want to learn new skills to get another job in the near future. Your financial situation will be taken into consideration prior to any new lending and will be subject to lending and credit criteria.

Financial Emergency #6: A Family Member Passes Away Suddenly

This isn’t a nice scenario to think about, but everyone will die someday, and sadly for many people death comes suddenly and unexpectedly, leaving family members to meet funeral costs and deal with the aftermath. Having to find the money to cover the costs of a funeral is an added trauma that no-one wants to deal with in addition to their mourning.

Financial Emergency #7: Something Happens to a Loved One Overseas

There are few things worse than the feeling of helplessness we experience when something happens to a loved one overseas. The first thing many of us would want to do is jump on the aeroplane and be with them, or be able to fund their journey home.

What to Do When Faced with a Financial Emergency

If any of these financial emergencies land at your door, what can you do about it?

Stay Calm

The most important thing to do is not to panic. It is very easy, understandably so, to commit to a knee-jerk reaction that in the long-term leaves you in a worse financial position. While the likelihood of financial emergencies is that you are going to have to spend money you don’t really want to and hadn’t budgeted for, by staying calm from the moment you become aware of the problem you could potentially save yourself some money and much undue stress later.

Put a Plan Together

When you’re calm and thinking straight, it will be much easier to put a plan together. How are you going to deal with the emergency you are faced with?

Think about the following:

  • How much money do you need to deal with the problem?
  • What are your options for attaining the money you need?
  • What are the potential long-term implications of each option?
  • Is there any other financial help available?
  • Can you involve friends and family members in solving the emergency you are faced with?

When Considering Your Options, Think About a Personal Loan

When you are assessing your options for attaining the money, it is likely you’re going to end up with three options:

  1. Using your own savings.
  2. Spending money on a credit card.
  3. Taking out a personal loan.

Given the nature of an emergency, it is highly unlikely this is a situation where you’re going to be able to restructure your household budget and move forward slowly but surely.

Why is a personal loan likely to be the best option of the three offered above?

  • You might not have enough in savings to meet the needs of your emergency. Also, if you have been saving money for a specific reason, suddenly you’re back to square one with your savings goals.
  • You also might not have enough available credit on credit cards, but more importantly you should consider the long-term implications of spending a significant sum of money on a credit card and what this could mean for your credit score. A credit card can often seem a quick fix, but could easily prove the most expensive option, too.
  • With a personal loan, you can borrow what you need, get a regular repayment amount, and have a date when you’ll finalise the loan.

Personal Loans with NOW FINANCE

If you are facing a financial emergency and are considering taking out a personal loan, here at NOW FINANCE you can get your interest rate before you apply so you know exactly where you stand. We understand that financial emergencies can hit anyone, and will always look for ways we can help you. We also offer specific personal loan products for all the scenarios explained earlier in the article. Get started with your loan application by clicking on the link above, or give us a call on 1300 275 669 to discuss your needs.

Disclaimer:  This article contains general comments and recommendations only. This article has been prepared without taking account of your objectives, financial situation or needs.  Before taking any action you should consider the appropriateness of the comments made in the article, having regard to your objectives, financial situation and needs. If this article relates to the acquisition, or possible acquisition, of a particular credit product you should obtain and consider the relevant disclosure documents before applying for the product.

 

Approved customers only. Terms, conditions, fees and charges apply. All applications are subject to NOW FINANCE’s lending and approval criteria. Settlement times may vary depending on circumstances. Loan repayment terms range from 18 months to 7 years. Interest rates range from 6.95% p.a. (8.57% p.a. comparison rate) to 17.95% p.a. (19.53% p.a. comparison rate).

*Comparison rates are based on a loan of $30,000 over 5 years.

^No fees apply only to approved loan amounts between $5,000 to $15,000. Other fees including late payment fees and dishonour fees may apply.

WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

EXAMPLE: An unsecured personal loan of $30,000 borrowed for 5 years with the interest rate of 6.95% p.a. (8.57% p.a. comparison rate), would estimate to a minimum total amount payable of $36,883.60 via the weekly payment option (including a $495 establishment fee and $13 per month administration fee). Rates are subject to change.