Every one of us has at some point had to deal with a financial emergency, whether it is an unexpected medical bill, a home emergency or a major car repair. In life, accidents happen and you just have to face it.
The best way to handle this is by using emergency funds you have already saved (check out our previous article on how to build an emergency fund). But what if you haven’t saved enough yet to pay for the emergency bills? We have put together 5 tips that you can follow to address your pressing financial needs.
1. Don’t panic – understand the situation
Do not let your emotions take control of the situation and end up making the wrong decision that will cause more damage in the long term. Stay calm, think rationally and evaluate the situation carefully.
What caused this emergency? When do you need to have the money? What is the exact amount of cash needed? Evaluating the situation will help you to decide on the best course of action.
2. Cut down on expenses quickly
Go through all your expenses, identify those that are not essential and cut them down or delay spending on them. This will help you to save the money you need to fund the emergency.
For example, if you have plans to take a holiday, want to buy the latest mobile phone or are considering subscribing to premium gym/movie channels, then those expenses can be cancelled or delayed without causing any inconvenience to your life.
3. Seek help from friends and family
While you may be embarrassed to ask for money from your friends and family, a little help from the people closest to you is what you need to get you through the situation. They will likely lend you the money without terms and conditions or high-interest rate.
The downside to seeking help from friends and family is that because they are close to you, things might become a little complicated as it involves money. Consider this option carefully and see if it is a good decision for you.
4. Get a fast but safe and affordable loan
If you don’t want to involve your friends and family, you can get a personal loan from a financial institution quickly, especially if you have maintained a good credit history. Just borrow what you need and what you can afford. Set the term for as short as you can in order to reduce the interest you will have to pay.
If you are a civil servant, you can apply for a loan from Yayasan Ihsan Rakyat or Yayasan Dewan Perniagaan Melayu Perlis, where you can receive the loan in as little as two working days. Most importantly, they are safe and Syariah-compliant, with funding from RCE Marketing Sdn Bhd, a subsidiary company of RCE Capital Berhad, a Bursa Malaysia listed company. Applicants with low incomes or less-than-positive CCRIS/CTOS credit history are still eligible to apply, thus giving applicants a much sought-after sigh of relief.
5. Avoid a loan that is too good to be true
Many loan scammers take advantage of people’s vulnerability, especially when the borrower is in distress. Hence, you need to stay calm and assess if the loan offer makes sense or not.
Don’t even think of going to unlicensed moneylenders who promise immediate cash but will rip you off with their exorbitant interest rates. Be careful of loan agents who offer too-good-to-be-true features, such as interest rates as low as 3.99% and close to a 100% pay-out and don’t look at your credit history. Read our previous article about the things to look out for when applying for a personal loan.
Plan for the next financial emergency
Once you have been through a difficult time, don’t just think that another emergency won’t happen again. Start planning now. Build an emergency fund so you have peace of mind when you have to pay for an unexpected expense.
Get your finances in order and consider taking out insurance, which you can claim for medical expenses or for your house.
This article is prepared by Direct Lending, an online personal lending platform that assists borrowers in finding the best loan for them safely and quickly. We work with reputable lenders and offer special cash rebates for financing from Yayasan Ihsan Rakyat or Dewan Perniagaan Melayu Perlis so that you can get more cash in hand to address your emergency. You can check your eligibility anytime for free