Sometimes, even if you strictly follow your budget, you still find yourself cash-strapped. Add an emergency expense to that situation, and you’ll probably resort to swiping all your credit cards and signing up for a payday loan. Those funding options aren’t entirely a bad idea, but they usually come with high interests. If you want an equally quick yet smarter financing option, consider applying for a personal line of credit.
Quick Access to Funds
BankPatriot.com identifies personal lines of credit as a financing option ideal for customers who want access to funds for short-term or emergency expenses, such as car repairs or tuition payments. You can apply for a line of credit at the same bank at which you have a checking account. This way, you can easily write checks if you want to make a purchase using your line of credit. Also, unlike personal loans, you don’t have to wait for days or weeks before you get approved and receive the money. A line of credit, in a way, works like a credit card, as the money is already there in your account, ready to be withdrawn anytime. But compared to credit cards, personal lines of credit offer more competitive rates.
In general, personal lines of credit come with lower interest rates than a credit card cash advance or a payday loan. Because of the lower rates, some people even take out money from their line of credit to pay off their high-interest credit card debts. Plus, with lines of credit, you’ll only have to pay interest on the amount that you used, and no collateral is required.
With all these benefits, personal lines of credit offer something that other funding options don’t—and that’s the financial flexibility you may need in times of emergencies and financial hardships. Just a quick reminder, though: don’t over borrow. These lines of credit are a great resource only if you use them wisely.