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Financial Safety Net: What To Know About Emergency Loans for Low-Income Families

For low-income families who haven’t had a chance to establish a financial safety net, emergency loans might be a real lifesaver when a disaster strikes.

Though, ideally, everyone should have an emergency fund set aside, that is not always possible in reality.

So, when exactly would it be worth considering applying for an emergency loan, and how to figure out whether the lender can be trusted or not? Here is everything you need to know.

Research Existing Programs

Safety net programs have been established by the federal government. They provide assistance, subsidies, and education to low-income individuals and their families, as well as to people with disabilities.

These programs are, in general, funded by the federal government and then administered by the states. The main ones can be grouped into four categories:

  •             Health care (Medicare, Medicaid, CHIP)
  •             Nutrition (WIC, SNAP)
  •            Housing (LIHEAP, Housing Choice Voucher Program, etc.)
  •            Financial assistance (EITC, SSI, TANF)

To determine eligibility, these programs use income levels, as well as residency and categorical (age, family size, disability, etc.) requirements. Determining whether or not you are eligible can, in some cases, be challenging as the process is not consistent from state to state and from program to program.

If your state has implemented an integrated eligibility systems (IES) project, you would be able to take advantage of this technology. After you complete a special form, the program should determine all the human services programs that you are eligible for.

If your state does not yet have such a technology, spending some time making the right phone calls and attending a few appointments would definitely be worth it as you’ll finally be able to receive the assistance that you qualify for.

Cut Your Monthly Expenses

Low income expenses

An obvious piece of advice would be to save the money that you would otherwise spend on restaurants, cafes, cinemas, etc. But trying to cut monthly expenses might be a more effective decision as it won’t necessarily have such a big impact on the quality of life that you’re used to.

  •        Check all of your monthly subscriptions. If you’re paying a couple of bucks each month for a music subscription, then you might want to consider canceling it altogether or switching to a new platform that offers a free monthly trial.
  •         Educate yourself on various ways to save more water and electricity. For example, you might want to start switching the water off when you’re brushing your teeth or get energy-saving light bulbs.
  •         If you’re still paying for a landline that you practically never use, it might be worth switching to an emergency-only rate or canceling the service.
  •         Most credit cards charge a fee every year just for having the card (the fees typically range from $95 to $500). If you want to save these extra few hundred bucks, then you might want to switch to a no-annual-fee credit card.

Consider Buying Certificates of Deposit

High-risk investments (such as stocks, for example) are not the best investment option for low-income families and for those who don’t yet have at least 3-months’ worth of emergency fund set aside. But that does not mean you can’t make your money work for you.

Certificates of deposit (CDs) are one of the ways to keep your money secure and earn a fixed interest rate at the same time. It is, basically, a savings account that holds a fixed amount of money for a certain time. In exchange for that, the issuing bank will be paying you interest. And when you finally redeem your CD, you will get not only the money you originally invested but also any interest.

Do bear in mind that if you pull your funds from a CD before it matures, you will most likely incur penalties. The terms can range anywhere from a month to years (typically, longer terms offer higher interest rates).

To make the money available to you, in case you ever need to urgently access the funds, you can create a CD ladder by buying multiple certificates of deposit at once. In such a way, you’ll never have to wait for too long until one of your CDs expires.

Insure Yourself Against Disaster

Just like everyone else, you might be thinking that a major crisis is unlikely to happen. But unfortunately, such things do occur, and in the absolute majority of cases, families don’t have an emergency fund that is big enough to cover these urgent expenses.

Insurance is a great way to protect yourself (to some extent) from high-impact events, such as house fires, for example. A small, regular investment can, quite literally, save you in the future if disaster strikes.

When choosing the right insurance type for you, make sure to compare quite a few options offered by various companies. If you heavily rely on your vehicle in your everyday life, then it might seem logical to get comprehensive auto insurance, and so on.

Apply for an Emergency Loan

All the tips mentioned above will definitely help you establish a financial safety net. But it might take you a few months or even years to save the amount that you’re aiming for (especially, if you qualify as a low-income individual).

During this time, plenty of things can happen. And, unfortunately, some of them might require you to spend a small fortune.

If your emergency fund is not big enough to cover the unexpected expense, then it might be worth considering applying for an emergency loan.

What Are Emergency Loans?

Usually, emergency loans are unsecured loans which means that you wouldn’t have to provide any form of collateral. They typically (but not always) have shorter repayment terms, and can be funded within a couple of days. The latter is especially important when you’re dealing with an urgent expense.

Most emergency loans can be paid back in fixed monthly installments. You’ll know exactly what sum you need to repay every month, which allows you to manage your budget and set aside the necessary amount without seriously compromising your lifestyle.

Such loans should not be used for trivial purchases or business purposes. Emergency loans can come in handy if you need to quickly take care of a car or house repair, medical bills, unexpected travel expenses, etc.

Emergency Loans for Low-Income Families

Low-income families have a few options to choose from.

Loans from Credit Unions

Some non-profit credit unions have special loan programs that can help low-income families with limited or no credit scores.

One of the products offered by credit unions is known as ‘PALS’. However, the main downside of such loans is that a lot of them are payday loans which means that the maximum amount that you can count on would be only a few hundred bucks (which might not be enough to cover your emergency).

Charitable and Non-Profit Lenders

Some non-profits can help you pay an emergency bill while you’re waiting for your paycheck, but such funds come with some restrictions.

You will most likely have to undergo extensive financial counseling. And the sum will typically be funded only after you can improve your financial literacy in such a way. In a word, it might take you weeks or even months to finally get your hands on the much-needed sum.

Loans from Online Lenders

Simple Fast Loans is one of the online lenders offering installment loans to low-income borrowers. Furthermore, no or bad credit is not the main factor that will determine whether you will qualify for the loan or not.

What To Consider When Looking for an Emergency Loan Lender

No matter what emergency loan lender you decide to pick, you would have to make sure that the organization or the company is legit.

If you know what to look for, it will take you literally a couple of minutes to find out if the lender deserves your trust or not.

Simply make sure that the company has a physical address and a real phone number, ensure that they are registered in the state where you want to borrow the money, and have a quick look at their website — if the webpage is secured (has a padlock symbol next to the page’s address), then you’re most likely dealing with a reputable organization.

How To Qualify for Simple Fast Loans’ Installment Loan

Simple Fast Loans is a legitimate, fully-licensed company that has been on the market for years already. This online lender will consider all types of income and credit, so if there is a certain amount of money that you urgently need, applying for an emergency installment loan will be worth your time.

Furthermore, if you have all the necessary information ready, it will take you less than 10 minutes to fill out the online inquiry, and you can easily do that from the comfort of your own home.

Here are the extremely simple steps that you would have to follow:

  1. Fill out the fast and easy online application. You would be asked for some basic information, such as your phone number, for example. You will also need the info from your government-issued ID and the checking and routing number for the checking account (the one where most of your income is deposited).
  2. After you submit the online form, you will get the loan decision immediately.
  3. If the decision is positive, the company representatives will set up the loan agreement for you, and all you would have to do is sign the documents online.

When Will the Funds Be Released?

This is one of the best parts about applying for an emergency loan from Simple Fast Loans. The company representatives understand that you urgently need the money, and the sooner you receive it, the better.

The installment loan amount can be funded the following business day. But if the loan has been signed before 2 PM, you might end up getting the cash that same day.

Establish a Financial Safety Net Today!

Saving enough money to establish a financial safety net can be extremely challenging. And that is especially true for low-income families. If a disaster happens, the chances are high that you won’t have enough funds to cover the unexpected, urgent expenses.

In such situations, one of the ways to deal with the problem might be to apply for an emergency loan. Simple Fast Loans works with clients with different levels of income and credit scores, and the friendly representatives will do everything they can to help you receive the sum that you desperately need. To take care of your emergency expense in the shortest timeframe, fill out the short online inquiry now.

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