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5 Emergency Loan Options for Parents With Bad Credit

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Emergency Loan Options

Less than half of Americans have enough savings to cover a $1000 emergency. Dealing with an unexpected bill for yourself is bad enough. Moreover, if you’re a parent and you’re faced with an emergency for one of your kids, you’re going to be in a tight spot.

To be prepared for any emergency, there are various money-saving hacks for parents to try. But till you’ve saved enough to cover a major financial shortfall, you may have to count on certain lending options. If you’re in debt because of an unexpected emergency, an attorney at Wilkie Puchi LLP can help you settle for less.

So, let’s look at 5 emergency loan options if you’ve got bad credit and need money now.

1. Secured Loan

A secured loan means you’re putting up some sort of collateral as security for the loan. If you don’t repay the loan, the lender gets to keep the security.

If you have investments or other assets that you can’t quickly convert to cash but have a stable value, you may be able to use them as security for a loan.

2. Credit Union Loan

Credit unions are often more flexible than banks when it comes to lending money. If you already deal with a credit union and have been a long-time customer, they may be willing to work with you even if your credit score isn’t the best.

3. Mortgage or Line of Credit

If you own your home or other real estate and it has positive equity, you may be able to get a mortgage or a home equity line of credit. This is another type of secured loan since the equity in your home is being used as security for the mortgage.

Be careful when choosing this option though. If you can’t repay the loan for some reason, the bank or other lenders could foreclose on your property, leaving you out in the cold.

4. Title Loan

If you own a car or other vehicle, it may have enough value to qualify for a title loan. Once again, this is a specific type of secured loan that uses the value of your vehicle as security against the loan.

Keep in mind that your car could get repossessed if you aren’t able to make the loan payments. That might not be quite as serious as foreclosure but it could still present problems.

5. Payday Loan

Payday loans are one of the most common types of emergency loan options but they’re also one of the most expensive. These services loan you money based on how much you earn and charge a higher interest rate and often other fees for the privilege.

They can also have a snowball effect. When you get your next paycheck, some of it goes to pay off the loan, leaving you short. If you need to take out another payday loan to make other payments, you’ll keep facing the same problem every payday.

Be Prepared When Applying for an Emergency Loan

Whatever type of emergency loan you choose if you need cash now, make sure you’re prepared ahead of time. Before applying, check your credit report so you have an idea of how likely you are to be approved for the less risky types of emergency loans. You’ll also see if there are any mistakes in the report that could be dragging your score down.

Gather your social security number, income details, photo ID, and other important personal information. You’ll need them when you apply for any of these loans.

Finally, shop around to find the best deal. It might be an emergency, but take the time to look at a few options so you know you’re getting the best deal possible on short notice.

Be sure to check out the rest of our site for more helpful financial tips for parents and kids’ product reviews.

Photo credit: Gotcredit.com

3 Factors That May Keep You From Getting a Mortgage

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mortgageWhen it’s time for you and your family to buy your first home or upgrade to a new home, you’ll be presented with getting a mortgage. And before you begin your house search, and perhaps talk to someone like this mortgage broker malvern, it’s important that you know what kind of rates you qualify for and how much of a home loan you can comfortably carry.

There are certain circumstances that make it difficult to get a home loan, though.

Here are three factors that can limit your ability to take on a mortgage.

Bad Credit or No Credit

The better your credit, the lower the interest rate on your mortgage will be. That’s why it’s important to work on improving your credit score months before applying for a mortgage.

If you have no credit or bad credit you’ll likely be turned down for a mortgage.

Before applying for a mortgage try the following:

  • Check your credit score (you can do so for free at a place like Credit Karma)
  • Check your available credit to debt ratio
  • If you have a lot of consumer debt work on paying it down

You should also work on saving up a sizeable down payment for your next home.

Self-Employment

Self-employed people can have a hard time getting mortgages – or any type of credit. Generally speaking you’ll need at least two years of self-employment taxes. You’ll also need to provide bank statements showing the income you’re bringing in.

Another choice you’ll have is to apply for a contractor mortgage. Some banks are now making mortgages easier to obtain for independent contractors and freelancers. If you’re in this situation ask your banker for advice for contractors.

You Have Too Much Debt

Having too much debt can not only limit the amount of money the bank will loan you but it can also prevent you from getting a mortgage altogether.

Before you decide it’s time to take on a home loan start working on paying down your existing debts. By doing this you’ll lower your financial burden, increase your credit score, and also increase the likelihood of you being given a home loan.

Conclusion

If it’s time for you and your family to purchase a new home take some time to make sure you’re financially prepared. Pay down your debt, research types of mortgages you may qualify for, and work on improving your credit score.

With hard work and preparation you’ll put your family in a better financial position and hopefully, a new house!

Have you run into any of these problems?

Soccer and Debt Infographic

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Does debt have you on the sidelines when you’d rather be working toward your financial goals? Shedding debt is a necessary step in unencumbering yourself in your financial life. Once done, you have much more saving power. You could be in debt for a variety of reasons and at varying degrees. The cause and amount of debt you are under can affect the strategies you should take to get out of debt. However no matter how much debt you are under, there is a way out. Whether you just have a little bit of debt and can still make payments or you have a huge amount there is a game plan for you.

Soccer Debt

If you are worried that you can’t deal with your debt on your own try talking to experts at places like Consolidated Credit to see if the can help make your payments more manageable. To determine the kind of debt you have and the possible solutions at your disposal, read through this infographic. Whether, you are at stage 1 or stage 4, Consolidated Credit is on your team.

Happy New Year!

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The New Year is a time for looking back and looking forward

Photo by Christmasstockimages.com

Happy New Year everyone!  I had a pretty good 2010 and really looking forward to seeing what 2011 will bring.

We had a party at our house last night and really had a blast.  Nothing too crazy, nowhere near as big as my parties used to be, just a few close friends and family, music, games for the kids, beer and drinks for the adults and a good cigar to say goodbye to 2010.  With all that going on last night it meant for a rough start to 2011 but it was worth it.  Every new year should start with at least a little bit of a hangover so things can only improve as you go.

My debt story

As I have mentioned in previous posts, my wife and I are in significant debt from a business that we ran for several years that ultimately failed.  Shortly after it’s failure at the end of 2007, I was able to sell what assets we had left in the business and secure a job for me and my employees with the company that bought me out.   Later in that same year, my wife, who used to work for me, got a great job in her chosen profession.

2008 became the year we started over but we were starting over with a huge pile of debt that really hamstrung us.  We sat down, created a budget and created a 5 year plan to eliminate the majority of our debt.  We would do without most perks and focus on two things; our debt and our two boys.  2008 and 2009 were VERY difficult years but we stayed on track, stuck to our plan, tightened our belts and made it through them.  2010 was still a struggle but it was the first year where we really started making some progress.

I am very happy to report that 2010 ended with a bang, it was the first year in a long time where we had a little breathing room and could enjoy ourselves a little more while dealing with a little less stress.  The Ecommerce company that acquired my old business had it’s most successful year ever and I have been able to gain some ownership in that company.  My wife’s job continues to go well and we have much to be thankful for.

It was looking a little bleak for awhile but with the success of 2010 and the hopes that 2011 brings, it’s looking better and better that we will be able to pay off the majority of our debt by the end of 2012.

How optimistic are you for the new year?