We’re living through unprecedented times in which the economic crisis is affecting everyone with its terrible consequences. The global lockdown resulted in many people losing their jobs and, thus, stopping the cash flow for many people.
Some people’s financial situation is hanging on a thread and multiple businesses are incapable of purchasing new capital assets due to low cash flow. This might lead many people to think that there’s nothing they can do to rebound from that rut. However, these following points will explain why this notion is faulty.
1. We Can’t Discern the Future of Many Investments
The COVID-19 has spread across the globe in mere months and a global lockdown followed, forcing a lot of people to stay indoors and resulting in the regression of the global economy. Many businesses, despite taking many preemptive measures are losing a lot of their income, resulting in delayed salaries and even layoffs, which added more pressure to the labor market. With many investments being in a precarious state, a lot of people have opted for using instant and liquid cash, especially with the number of emergencies that require instant money during this time. It should be noted, though, that the stock market volatility is likely a short-term circumstance, just as was the case with the stock market back in 2003 during the SARS epidemic.
2. To Help You Carry out Your Financial Plans
You might have plans to fund your house renovations, your children’s tuition fees, or to make up for what you’ve lost in certain investments. The financial advisors from luckyloans.co.uk/ say that whether you have cash in your business bank account, receive loans, or receive it from a business partner, instant cash is always going to be a great asset at these times. If you’ve already set up financial goals (home purchase, college fees, wedding, retirement, etc.) getting enough cash is going to help you meet these goals. So, instead of relying on investments that are being threatened by the current economic crisis, you will have cash in hand to make up for reduced cash flow and meet your financial goals.
3. Emergency Expenses
As we’ve mentioned before, instant cash is important in emergency cases, and though we might not want to think of such a possibility, anyone can become bedridden during the COVID-19 pandemic. Thus, you will need instant financial help to aid you in these situations.
- Medical Bills: Instant cash is going to be of major help whenever one of your family members needs costly medical treatments, surgeries, fertility treatments, or any kind of medical treatment that will cost more than $5,000. There are loans that are specifically designed to cater to your medical needs and offer you a set of features along with financing medications and treatments.
- Funeral Expenses: The death of one of your family members is a very painful event. It is certainly something uncomfortable to consider, but still important all the same. Unlike surgeries, home renovations, or any big purchases, the death of one of your family members could happen at any time without you being prepared at all. So, it is always good to know where you can get instant cash to finance these unexpected events. Funerals can be pretty expensive, what with funeral home services you’ll have to hire, the burial plot, and the casket, which can all end up costing you a couple of thousands of dollars.
4. Large Purchases
Because lockdown is forcing everyone to stay in their homes, life can become boring very quickly. So, a lot of people have resorted to making multiple purchases to ward off the boredom. You might want to make a large purchase, such as getting a gaming laptop/ computer, setting up a gaming center, or purchasing essential appliances for your house.
If you don’t have the money for such purchases, you might want to get instant cash which you can get through personal loans. It’s true that you’ll have to pay for interest and upfront fees, but if you think about it, this can save you a lot of money in the long run. Getting a personal loan will also provide you with instant cash for large purchases like a car, a recreational vehicle, or a motorcycle.
5. To Pay off an Existing Debt
Getting instant cash to pay off existing debt might sound like you may not get out of the debt cycle, since the main source of instant cash are loans as well. However, many people apply for personal loans to finance their existing debt. Because they can’t pay the whole sum in one go, personal loans allow them to pay their debt with a monthly payment. Sure there is an interest rate involved in the whole deal, but personal loans usually have a low-interest rate. In addition to this, if you already have a good credit score, you won’t have to settle for a type of loan with a high-interest rate. This might also sound like an excellent deal, especially if you’re paying your high-interest debt with a low-interest loan.
6. Improve Your Credit Score
If you’re getting cash through a personal loan, then this could help you improve your credit score significantly. Personal loans require monthly installments, which can improve your credit mix. Having a variety of loans can also help you get a better credit score, though you might have limited options with personal loans. If you make your loan payments on time each month, then you’re likely to have a better credit history, which will eventually contribute to your score. In addition, it can reduce your credit utilization ratio, which measures the amount of revolving credit that you use. The lower the amount of revolving credit you have, the better your credit score is.
Getting instant cash is going to help you during the pandemic, but only in the right circumstances. You have to make sure that you can afford to pay cash for whichever loan you’re applying to. Also, be aware that loans can both improve and hurt your credit score if you don’t tread carefully. For example, defaulting from paying your monthly loan payments can get you deeper into debt and affect your credit score. So, make sure to consult a financial expert first to ensure that you’re taking the best course of action.