Life can throw a curveball at any moment, so bracing yourself for unforeseen expenses is important. As long as enough cash is coming in, you are in a saddle. Complications erupt conspicuously when all of a sudden, you begin to feel the pinch, which happens in two situations - cash inflow is interrupted, or your expenses rise out of nowhere.
When an emergency crops, you can turn to an online lender to tide you over, but what if you have already taken on a large debt and are confronted with cash problems? For instance, you have been keeping up with payments of personal cash loans in Ireland, and eventually, you get your cards from your boss.
The whole world has crushed you. Rarely will savings help cover your regular expenses, let alone pay off the debt. To fall behind in payments means taking a toll on your credit score and attracting interest penalties.
If your financial situation is turned upside down, you will quickly need to figure out a way to keep up with payments. Otherwise, you will fall into an endless circle of debt. Here is how you can get out of a personal loan when being cash strapped:
- Inform your lender as soon as possible
As your boss moves the furniture around, you know that you are in for a financial crisis. Despite savings, it could be hard to stay afloat. You cannot stop making payments without keeping your lender in the loop.
The first step is to inform them of your financial situation. You can drop them an email or call them to tell them your scenario. Do not beat around the bush; just stick to explaining your problem. Make sure you do not lay it on thick otherwise. You will fall deeper into your debt problem.
The sooner you do it, the better it is. A lender would need some time to revise the repayment plan based on your current financial situation. Here are some options a lender will likely put you on:
- Unless you land a new job, you will pay only interest.
- You might be put on payment holiday for a month or two, but interest will accrue on the outstanding balance. However, you can escape late payment fees.
- A new repayment plan will be offered that will let you make smaller monthly payments until you bounce back.
Choose a repayment wisely. If you still find it harder to make payments, the lender will not change it.
- Avoid taking out predator loans
Thankfully you have savings to fall back on to tide over, but it is likely that it is not sufficient. Further, if unforeseen expenses crop up again, it will be another turn of the screw. Out of panic, you can take out a predator loan.
These small loans will be available to you without a credit check that you will have to pay down on the due date in a lump sum. The repayment term will not be more than two weeks. Not to mention, it will be arduous to manage both kinds of debt obligations.
Under no circumstances should you take out these loans. However, you should seek better alternatives if you cannot put it off. Instant loans in Ireland can come in handy. A lender would check your credit score and repaying capacity before signing off on your application.
These loans carry lower interest rates than no credit-check loans. Another benefit of using these loans is that you may be able to repay the debt in weekly instalments. It is always recommended that you carefully check your repaying capacity before taking out a loan. Otherwise, you might fall into a debt trap.
- Manage your expenses
You will have to tighten your belt to be in the driving seat unless you land a new job. Much as you have a lot of savings, you should be careful with money. Do not fork it out. Just say no to all frivolous and discretionary purchases.
This is when you live off a lean budget that only helps meet essential expenses. It is very easy to get carried away when you have a considerable size of savings. Create a budget that should have room for meeting only essential expenses.
As far as it is about food and travel, you can cut back on it by buying it in bulk and from a thrift store. Cover short distances by walking on foot. Use public transport instead of your personal car to save money on fares.
If you simply keep withdrawing money from your savings, you will end up emptying it sooner rather than later. Budgeting is the key to stretching your money. Have your head screwed on, and then you can easily deal with this phase.
The bottom line
If you have taken on a personal loan and then suddenly your financial situation is turned upside down, you should immediately take hold of it. Talk to your lender and inform them about your true financial situation to know the help they can offer to you. Do not take out a very expensive loan if you need some money urgently. You should instead try less expensive loans. Create a budget and try to meet only essential expenses. You should not spend on discretionary expenses until you find a new job.