Most full-time workers can’t afford to work without some type of income coming in, and three weeks is certainly pushing many paycheck-to-paycheck households into considering ways in which to pay for their needs and obligations. Thankfully, there are a number of ways to fund your needs, but not all are equal.
Payday Loans
Payday loans, also known as cash advances, are the worst option people can turn to for financial help. These short-term loans are very easy to get, but the interest rate attached to it can turn a $500 loan into so much more. Plus, these loans may be due within two weeks after first given, and if not paid for, then another loan must be taken out which includes more fees, interest, etc.
Most states have a maximum amount on fees, ranging from $10 to $30 for every $100 that’s borrowed.
401(k) Loan
Most financial advisors will suggest not using a 401(k) loan, but federal law lets employees take out 50 percent of 401(k), and they have five years in which to pay the loan off. The interest rate is often lower than other financing options.
Credit Card Cash Advance
The most common but most expensive option to borrow money is through a credit card cash advance. However, the interest rate on credit cards sits around 17 percent, with rates even higher for cash advances. There’s also the transaction fee of up to five percent and the loan’s own interest.
Personal Loans
These are unsecured loans that often come with reasonable interest rates (for those with good credit) and do not need collateral for security. Payments are often automatically deducted from the borrower’s checking account, which reduces the chances of a person defaulting on the loan. It’s a worthwhile option to credit cards or payday loans in Alabama.
Home Equity
In the past, homeowners would use homes to get cash for their needs. However, due to the tighter lending standards and falling home prices, it’s much harder to get a home equity loan and line of credit. Still, it’s an option that some homeowners feeling the pinch of the government shutdown can consider.
Government Shutdown Assistance Programs
There are several financial entities that will help military and federal workers on furlough to make ends meet with a furlough relief loan. For example, the Navy Federal Credit Union, Congressional Federal Credit Union, Pentagon Federal Credit Union, and USAA offer loans for workers if they need help during the history’s longest-ever government shutdown.
