Need Urgent Money: Choosing between Savings and Line of Credit
Life is made of unforeseen things: disasters, job loss, illness … anyone can face an urgent need for money.
If you have money aside, you will certainly be asking yourself the question of using your savings to pay urgent bills when it was destined for a completely different project. However, rather than squandering your personal funds, you should know that there are other financial solutions that can serve as alternatives. Line of credit, money supply, are all possibilities that have many more advantages than a simple loan.
Use your savings or use a reserve of money: we weighed the pros and cons to enlighten you.
Use a line of credit if you need urgent money
You want to borrow a specific sum of urgency for a given period? The line of credit is the most practical alternative.
What is the line of credit?
The line of credit is a reserve of money in which you will draw. To benefit, you can turn to different financial institutions such as banks or private institutions. This reserve does not need to justify its use, which allows you to use as much as you can the amount available. In addition, you will not have to submit new loan applications.
It is a suitable solution if you have planned to renovate, for example, when you have a need for urgent money.
Reimburse a line of credit
The repayment is quite flexible since you have the possibility to repay the amounts borrowed at the times that suit you the most. Once the amount has been paid, your money reserve is available again in full.
Need urgent money: when to use savings?
In today’s society, we have all been educated on the importance of saving money. Whether to save the expense of a future home, a life project, the arrival of a newborn, in case of job loss, illness or just to deal with a blow . It’s an essential safety mattress, and spending it is often a last resort.
Using your savings is exposing yourself a little more
The emergency has arrived, but you are not ready to use your savings for fear of not being able to cope with another blow?
If you use your savings to pay for an unexpected expense, you will save on the cost of the credit you will have to pay back, but you will be at greater risk in the event of a new emergency.
Why do you have to keep your savings?
For many, savings are used to cushion urgent expenditures, yet most would like to invest that money in projects or to grow it, and it is possible!
If you choose to take a credit to keep your savings you will be able to repay the monthly installments of your loan, you can secure this savings in case of another blow by using the interests of this money placed to reduce the monthly payments, you will enjoy also a more advantageous taxation and this will allow you to create a capital for the future while repaying your loan.
Between using your savings or using a line of credit if you need money urgently, you have the choice! But once used, the savings will be harder to rebuild. While the reserve you have with a line of credit allows you to keep your savings, and this even gives you the opportunity to make it profitable.