Many people will find themselves in financial difficulties at one time or another over their lifetime. It may be a short-term issue caused by a change in job or an unexpected car repair. Alternatively, you may find yourself with long-term financial issues due to being laid off or large medical bills.
No matter the reason for financial difficulties it is an extremely stressful situation to experience. Financial difficulties can cause or be caused by mental health issues and are nothing to be ashamed of.
If you are experiencing financial difficulties, the best thing you can do is to take steps as quickly as possible to resolve the situation. In the first instance, speak to the companies you are struggling to pay and check what they can do to help you manage the situation.
If you are having a short-term financial issue, there are several other ways you can ease the pressure until you get back on your feet. We have included some of the options below.
Credit Cards
The definisjon på kredittkort is a card that can be used to make purchases without paying the balance of the card immediately. When you apply for a credit card, you will be given a credit limit on the card, which is the amount you can spend on the card without it being declined.
You then do not immediately need to pay the bill for the card as, providing the card has no balance on it there is an interest free period for every purchase. If you have temporary cashflow issues looking for a credit card with 0% interest on new purchases can be beneficial.
A 0% interest card will give you a longer period to pay off the balance interest-free. So, if you need to buy a new car or your washing machine breaks and you have no spare cash, this type of card will help you in the short term.
While credit cards are an excellent way to relieve short-term financial pressures, if you cannot clear your balance in a timely way, it could lead to more troubles. If you do not clear the balance of your card in full before interest begins to be charged the amount you owe will increase monthly.
If you only make the minimum payment on most cards, the amount you pay will cover the interest and a tiny amount of your balance. So, if you are unable to pay the full balance before interest is charged, you should aim to pay as much as you can afford each month to reduce the balance as quickly as possible. Beste kredittkort https://www.kredittkortinfo.no/hva-er-kredittkort/.
Borrow Money from Family or Friends
Borrowing money from family or friends may not be the option most people would choose. There is a level of embarrassment for most people in telling those close to them that they cannot afford their expenses.
However, borrowing from loved ones can be the cheapest and sometimes only option available. Friends and family are unlikely to charge you interest on a short-term request for financial support, making this a cheaper option than borrowing from a bank or loan company.
Friends and family will also not complete a credit check before lending money to those they love. If you have a poor credit rating and cannot borrow money from a traditional lender, then being able to borrow from someone you know may be your only choice.
The risk of borrowing money from friends and family is that it can damage the relationship if you do not pay the money back within an acceptable time frame. It is best when borrowing money from loved ones that you create a repayment plan that is affordable for you and acceptable to the other person.
The only way to make this type of financial support work is transparent communication. Ensure that you continue that communication after the money has been used and continue to make the payments when you should.
A Short-Term Loan
An alternative to borrowing from loved ones is to take out a short-term loan. A short-term loan is an unsecured personal loan that you arrange through a lender or broker. As the name suggests, this loan is taken over a short period with interest added to the repayment term.
Short-term loans are often charged at a higher rate of interest, so you should consider the rate before entering into the loan agreement. You can use a comparison site to see the types of loans available to you and help you consider which loans are the best value for you.
Short-term will mean different repayment terms to different people; you may see a short-term loan as months rather than years, while others will see short-term as up to five years. It is important to use a reputable lender for this type of loan.
You should also ensure that any repayment amount is affordable to repay over the length of the loan. While circumstances can change unexpectedly during the term of a several-year loan, you should not take out a loan you know you cannot afford to pay when taking it.
If you find yourself in significant financial difficulties where day-to-day costs of living are becoming difficult, it is time to begin looking at the other options that are available to you. You may not be aware of what options are available, so we have outlined three options below.
However, if you find that you need more information or do not know which is the best option for your personal circumstances, further help and support are available. There are a number of debt support services and mental health support services available online. Search for services in your local area for confidential support if needed.
Personal Loan
You may be able to take out a personal loan, depending on your circumstances and credit score, to help you with long-term or severe financial issues. A personal loan can be with or without collateral, and different rates and amounts will be available depending on which option you choose.
A loan is an excellent option if you wish to refinance several other debts into one manageable payment. If you have debts in addition to household expenses, keeping your debt repayments as low as possible will help with rising household expenses.
A loan will generally offer a significantly lower rate of interest than a credit or store card and will be fixed at the rate offered when you sign the agreement for the entirety of the loan. A fixed-interest loan is more beneficial than the variable interest rates offered on credit and store cards.
When taking out a loan, you can specify the term you wish to repay up to the maximum the lender offers. Extending your loan over a longer period will mean that you repay more in interest, but it can help keep the monthly repayments at an affordable level.
Most personal loans will allow you to repay additional amounts when you can afford to or repay early for a settlement fee. You should check the settlement fee before signing the loan to see how much this is and check if it will be financially worth repaying early.
Debt Relief Support
If you cannot or do not want to refinance your debts, you can consider debt relief support. As mentioned above, there are companies that offer debt support, which can include debt relief with partial amounts of your debt written off by the lenders.
Debt relief companies will often take over dealing with your debts and will liaise with your creditors to ensure that what needs to be paid is paid. Debt relief support can mean entering into a new repayment contract with your creditors and paying a lower amount over a longer term than originally agreed.
There are many different options for debt relief support, so it is best to obtain personalized advice regarding this. Before making any decisions, you should fully review the terms and conditions, as well as the impact of this option on your credit score.
It may be better for you in the long term to accept the negative impact on your credit score. This option will relieve you financially and mentally of knowing your debts are being repaid.
Bankruptcy
Bankruptcy is a last resort and something that most people will fight to avoid. However, bankruptcy, unfortunately, is a reality for some. If your financial situation is unlikely to change and your creditors are unwilling or unable to accept what you can afford, bankruptcy may be your only option.
Again, if you are considering bankruptcy as an option, you should seek professional financial advice and support to ensure nothing else can be done. If it is found that bankruptcy is your only option, the financial advice you are receiving should guide you through the process.
Declaring bankruptcy can have long-term effects on your credit rating and can affect the credit options you have available to you in the future, so it should not be entered into lightly. It is also important to consider your work sector when deciding if this is right for you.
Some job sectors will dismiss you or ban you from working in certain or all roles if you have previously been declared bankrupt.
Whichever option you choose to help with your financial issues it is important to remember you are not alone. You can and should access mental health support alongside financial support.