You’re hit with an emergency expense that’s outside of the boundaries of your budget. You don’t have enough money sitting in your checking account to take care of it, and you don’t have enough savings in your savings account to take care of it. So, you can’t afford to pay off this expense immediately, but you also can’t afford to ignore it either. It is an emergency, after all.
What can you do?
Your solutions for this tricky situation are limited. You could ask your friends for help and request an IOU. You could charge the expense to your credit card in hopes of paying it down later. Or you could look into online loans available in your state of residence. So, if you live in Little Rock, you could look up loans in arkansas and see whether you meet all of the requirements to apply. You just might be eligible to fill out an application and wait to see whether you get approved or not. With an approved loan, you could manage your expense in a short amount of time.
Using a personal loan to pay off an emergency is just the first step of your recovery process. Once the payment is done, you’ll have to direct your attention toward the repayment plan.
Find out what you can do to manage your loan repayment.
Assess Your Budget
The first thing that you’ll have to do is assess your monthly budget to see how you can comfortably handle your loan repayments and other essential expenses at the same time. It’s possible that your budget is tight, and you’ll have to trim some of your variable expenses in order to make room for these regular repayments.
These are just some of the ways that you can trim your variable expenses:
- Cancel subscriptions and memberships that you don’t use anymore.
- Negotiate your bills to get lower rates.
- Use coupons and discount codes when going grocery shopping.
- Use public transportation instead of taking rideshares.
What if you don’t have a budget? That’s a serious mistake. It will be much harder to manage all of your monthly expenses, including your loan repayments, without a personal budget onhand. So, you should download one of the best budgeting apps onto your smartphone or computer. Follow the steps to build your budget and then commit to those guidelines that you set.
Automate Your Payments
You don’t want to make any late payments. Not only will this lead to penalties, but it will also leave you with a higher amount to pay down. To make sure that you never miss a single due date, you should automate your payments to your provider. They will automatically come out of your checking account on the deadline.
Prepare for Next Time
Of course, you’ll want to make sure that you don’t fall back into this tricky situation all over again. You don’t want to face another emergency expense in a few months’ time and then realize you might need to apply for another loan to pay for it.
You have an opportunity to protect your future self. Assess your budget to see how much you can afford to set aside in emergency savings every month. This will be the very beginning of your emergency fund. Over time, your emergency fund will grow and become a safety net that you can rely on when something goes wrong. You can dip into your fund to pay off an urgent, unplanned expense right away — a loan will be completely unnecessary.
The loan repayment process doesn’t have to be a huge hassle. You can follow these tips to manage it the right way!