If you are like many California residents and are struggling to pay those high cost bills, you might wonder about the rumors of funds designed to help you with your bills. The rumors make it sound like you can receive cash to pay for personal bills, but this is not true. While programs are available to help low income families who are struggling, in most cases the helpful programs do not apply to the family or individual.
Emergency Fund Options:
When looking into emergency funds for bill relief, you have probably noticed that many of the solutions do not actually provide cash. Understanding the programs available and the downsides of the program is a key part of getting the appropriate solution to your financial problems in place.
The most common solutions for families or individuals who are struggling are programs like food stamps and state-issued help with specific expenses. Most of the programs are part of the federal or state welfare programs and are designed for those who fall within a certain income level.
If you are among the majority of the population who falls above that set income level, which varies by state, then you will find that you have limited options. Despite this challenge, you might consider the possibility of funds via loans.
Emergency funds that are available to anyone who is looking for a financial solution include payday loans or personal loans. These unsecured loans are often used to pay for emergency and unexpected expenses that you are not able to manage with normal income.
Like any other loan, taking out an emergency loan to manage your bills will require paying back the full amount of funds plus the added interest rate.
High Interest Rate Problem:
When you are struggling to manage your bills, debts and other expenses, you will often find that taking an emergency loan is tempting. The problem is that it actually creates a vacuum that ends up adding to the debt cycle.
Payday loans are particularly noted for making the problem worse, though a personal loan or any other debt used to manage the situation might also have similar problems. The debt cycle that follows is usually hard to keep up with due to the high interest rates and fees associated with emergency loans.
Emergency funding issued by lenders will often have interest rates that are extremely high. In the case of unsecured personal loans through traditional lenders, many consumers can expect interest rates between 20 to 30 percent. Even good credit ratings can result in high interest on this type of loan.
Those who opt for the short term payday loans for immediate relief and less paperwork will have a dire consequence. Interest rates on payday loans often result in 300 to 800 percent or higher in many states.
Alternative Solution To Bill Relief:
If you are struggling with your bills, one of the first things you should consider is the unsecured debts on your account. It is possible to consolidate and settle these accounts through negotiation so that you no longer need to worry about these bills.
Bills that often fall under the ability to consolidate include medical bills, unsecured personal loans, cash advances, credit cards and personal lines of credit. All of these bills are possible to negotiate for lower monthly payments, reduced interest and ultimately a reduced principal through settlement.
Negotiating with the creditors or the hospital can help bring down the expense to a reasonable rate. After you eliminate the debt, you then are able to clear up more money for necessities like the mortgage payment, groceries and utilities.
Beyond simply providing relief after 24 to 48 months via settlement, you can also expect to see some immediate results. Negotiation and consolidation will result in paying less out of pocket each month while building up the funds for settlement. You will pay one time and average a smaller total so that you have a little more of your income going into other necessities.
Consolidation and settlement is ultimately a way to bring down your total expenses and eventually eliminate unsecured debts so that you end up with the cash you need to pay for bills. You do not need to take out expensive loans when you need help paying for those unexpected costs or bills.
Emergency funds for bill relief are uncommon throughout the United States. You can expect that many of the programs are not likely to end up providing for your needs. Fortunately, you do have options even if you do not qualify for state solutions to help reduce costs. If you want to learn more about consolidation and how it helps, call us today or fill out the form for a free debt analysis.