Honey, I Broke The Bank: Using A Personal Loan For Emergency Expenses

In the humbling event of sudden financial hardship, we often find ourselves turning to assistance from a friend or family member. But if that’s not possible—you’re not alone. According to the Federal Reserve, a staggering 40% of Americans can’t cover a $400 emergency expense.

A personal loan could give you the help you need, temporarily providing some liquidity to cover the expenses of hardship. If you have stellar credit, it could be particularly useful—lower rates mean a personal loan could come with less interest than a credit card, providing some relatively quick cash flow in a crisis. Consolidating your credit card debt with a personal loan is another useful way to lower your debt, quickly.

Loans for emergency expenses typically take the form of lump sum installment loans with a fixed interest rate. Often times, a small amount ($1,000) is easy to obtain this way and can be just what’s needed for your situation. Of course, the range is large and can extend much higher.

Here’s a list of some common (and unfortunate) situations in which you could use a personal loan:

• Auto repairs (your new wheels broke down a week before vacation)
• Home renovations (it’s storm season and a tree fell through the roof)
• Medical hardship (an unexpected procedure is needed on short notice)
• You need a tuxedo for a speaking event (your speaking fee will easily pay back the loan)
• Pet emergencies (our best friends, our worst nightmare)

Whether you feel vulnerable or invincible right now, we can all get unexpectedly hit by a bill without a backup plan. Building and maintaining strong credit supports your financial wellbeing, and can be particularly impactful in a pinch. Set yourself up for the inevitable bumps in life and know that when they come—we’re here to help.

In providing this information, neither Laurel Road or KeyBank nor its affiliates are acting as your agent or is offering any tax, financial, accounting, or legal advice.

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