The COVID-19 global pandemic has brought all of us down to our knees. Business establishments are closing, and the unemployment rate is increasing rapidly, resulting in loss of income. Everyone is trying their best to squeeze out and exhaust all their financial resources, but tough times call for immediate help.
Ultimately, this is the time where we need to check all available resources to keep us afloat. This article’s primary goal is to provide aid and additional reference for borrowing money amidst the crisis. Furthermore, it includes a helpful suggestion on what type of loan you should apply to avoid additional financial burden.
Where to borrow money amidst the crisis?
It is essential to know that lending companies and banks still offer loans to potential borrowers. However, it is vital to check what loan type you should apply and what you should avoid.
Here are a few loan types available for you:
Personal Loan: Your best loan option
Banks and other lending institutions like CreditNinja still offer personal loans during the COVID-19 crisis. However, it is worth noting that before you engage in applying for a personal loan, make sure you have an outstanding relationship with any of the institutions.
Know it that banks prioritized customers who they have a standing relationship with or previously handled their financing. They can always receive new customers, but there are many factors need to be taken care of, unlike with their existing customers.
Lending companies offer personal loans, too, and taking out this type of loan during this crisis is the best option you got. They typically offer lower interest rates than other loan types such as payday loans and credit cash advance loans.
Some online lending Website offers loan services with competitive interest rates, especially if you have a good credit score.
Paycheck Protection Program: Aid for Small Business Owners
If you are running a small business or have recently opened a new business and unfortunately upended because of the crisis, you can turn to PPP or also known as Paycheck Protection Program. This is a type of loan program that can significantly aid entrepreneurs to keep their business afloat or at least fund their business enough to pay their employees.
The US Congress reportedly allocated the program with $600 billion and a refund of $310 billion with a sign from the president. This is to aid more businesses that weren’t able to enroll and get their share of funds during the first release from PPP.
Experts recommend that the earlier you sign up for the program, the better chances of getting the funds. It will allow you to have more room to budget your finances while keeping your business afloat and employees paid.
Other methods to add funds during the crisis
Here are the other methods you can resort for funding resources.
Stop paying your student loan or mortgage
Halting your repayment for your student loan or mortgage plans isn’t an ideal suggestion you will get, but due to an unexpected situation brought by the pandemic, this action is a good option for you.
Thankfully due to the stimulus bill, all federally-backed loans are officially suspended for six amounts without incurring interest. You can put in good use the money for repayment as an additional fund during the crisis.
If you are laid off by your employer due to budget-cutting, you need to apply for this benefit right away. The stimulus bill extended its aid to all unemployed individuals hit by the pandemic, which allows anyone who applied eligible for the $600 assistance every week. And that’s on top to whatever state-level benefits they are qualified at the same time.
Loans you should avoid during these tough times
We inevitably turn our heads to anything available within our hands reach, especially during desperate times. However, if you take on this road, always proceed with caution as you might not like what you will handle when worse comes to worst.
Credit card cash advance
If you own a credit card, taking out a cash advance is your quick solution. But remember, just like with payday loans, credit card cash advance also takes a high-interest rate. If you need to use your credit card, make sure to spend it on your daily necessities, as maxing out your card could result in a bad credit score.
During these desperate times, it might lead to much individual recourse to extreme measures when it comes to borrowing money. But take heed first before making a decision and check all your resources if there are methods that you can tap and can be helpful for you. With or without pandemic, you should be responsible for borrowing money. Any drastic move and decision will end you up facing a financial burden you don’t want.