Dealing with an emergency can put stress on your physical, emotional and financial wellbeing. Even though you may not see an emergency coming, you can still prepare for one financially, much like you might do for any of life’s big events. Some people plan ahead with insurance and savings. For many others, however, the emergency occurs without any advanced planning. In this case, you can apply for a loan to help with the emergency. This could be especially useful if you don’t have enough money from insurance or savings to cover recovery costs, or worse, if you don’t have insurance or savings at all. Let’s explore the nature of emergencies and some payment options to see if you can find the choice that’s right for you. If it makes sense, we can show you how to get a loan to help cover costs to get you through.
What constitutes an emergency?
An emergency situation requiring financial assistance or an emergency loan is typically unexpected and requires immediate attention. Often, part of the immediate action includes paying for damages that may have occurred. Let’s say, for example, you’ve returned from vacation to find a leaking hot water heater. This isn’t a life-threatening emergency, but it does mean taking quick action to stop the leak, arrange a replacement and clean up the mess. The fix may require more than just paying for a new water heater. It may involve replacing carpeting and drywall or repairing flooring that has had flood damage. Costs can add up quickly. The same may be true for many other emergencies. Fortunately, you have options in how to prepare for and deal with the aftermath of an emergency.
How to deal with an emergency
When emergencies happen, more than just money gets spent. Your time and attention are most likely focused on resolving the issue. Often, you’re not focused on costs, but mounting financial pressure can quickly become a sobering reality. Gaining access to money as soon as possible could be important. For those who’ve planned ahead and been able to build an emergency savings account, this may be the time to draw from it. For those who don’t have the savings, it could be the time to consider pursuing emergency loans that will help you get the money you need quickly with a streamlined process.
Consider these options related to the financial aspects of emergencies.
- Set up an emergency fund. Experts recommend that you have the equivalent of three to nine months of expenses saved as an emergency fund. The thinking is that an emergency can mean loss of a job or loss of income. When that happens, even paying for everyday living expenses can become difficult. However, if you have an emergency fund, you have given yourself some time to get back on your feet financially. If you don’t have an emergency fund, you’ll need to seek other options now and use this experience as a prompt to start saving as soon as you’ve recovered.
- Rely on a support network. You may be able to call on family and friends for moral support and possibly physical assistance. In some cases, you may even reach out for a short-term loan or gift. However, friend and family loans can be tricky. Remember the advice Shakespeare gave about loans between friends in Hamlet: “Neither a borrower, nor a lender be; for loan oft loses both itself and friend.” In other words, borrowing from friends can seem like a good idea in the short term, but cause problems in the long run with stress on the relationship. Imagine the situation of running your friend’s emergency savings low to bail you out because you didn’t build your own savings. This action might address your short-term need, but it can lead to resentment and loss of the friendship or a rift in the family. If you do seek a loan from a family member or friend, you should consider creating a promissory note with the amount of the loan and the agreed terms for repayment. Then stick to the repayment plan.
- Get a loan to handle the emergency. When you need additional funds, a loan can be a viable option. With a loan from a reliable financial institution, you can get fast access to needed money, you have a reliable and predictable process, you’re dealing with financial professionals and you’re not putting a burden on your friends and family. Discover has personal loans that can be used for emergencies or anything that comes up unexpectedly. It’s a straightforward loan with a simple application process and same-day decisions in most cases. And funds can be sent as soon as the next business day after acceptance, which comes in handy when dealing with emergencies.
It’s always good to be prepared for the worst, not by worrying but by knowing your options. Put your emergency plan in place. Begin saving now, if you don’t have insurance, get it and know that you can apply for a personal loan from Discover for added security in a time of need.