The Finance Blogger

We all need emergency loans from time to time. The amounts vary but usually it is a relatively small amount. Sometimes even just a $1000 will get us over the problem we have. It is almost always short term cash flow problems. We need to pay the rent, buy groceries, or pay utilities to avoid them being cut off. Whatever the reason, if we just had some money set aside for emergencies like this an emergency loan could be avoided.

Emergency Loans for $1000, $2000, $3000, $4000

Bottom line if you budget and have money set aside for emergencies then emergency loans would not be needed. If you are reading this you probably need a loan.

Before you accept the money and sign for the loan read the fine print. Make sure you understand how much it will cost you. Can you pay the loan back in time? If not what will the penalty be and what will the cost be?

An emergency loan can rescue you from difficult problems. At the same time you do not want to create more problems for yourself or your family.

Lenders will be happy to lend money just remember they are making lots of money on these short term loans.

For more information about emergency loans and lines of credit, click here.

One of our readers posed a question about using credit cards vs. lines of credit. He wanted to know if he would be better off arranging for a line of credit for renovations that he plans to do around his home. The total amount of expense being considered is $30,000 and he apparently has sufficient room on his credit cards to carry this amount, but would have to arrange for a line of credit from the bank. He is concerned about the amount of interest he might pay on any unpaid balance on his credit cards. So which is better, credit cards vs. lines of credit?

He makes sufficient income, has a great credit rating so should not have a problem being approved for a line of credit should he decide to go that direction.  This is a great question since many people just use their credit cards and end up paying more interest overall which makes whatever they purchased that much more expensive. Credit cards can have interest rates as high as 18% for regular cards and 29% for store credit cards. Compared to a secure line of credit with the interest rate at prevailing mortgage rates, credit cards are not a good deal at all.

Credit Cards vs. Lines of Credit

Credit cards are a great financial tool to use to pay for many items as long as you pay the balance on your credit card every month. If you do not the credit card company will charge you interest on the unpaid balance of something in the order of 18% and all the way up to 28% approximately if it is a store based credit card.
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We received a question about credit cards vs. lines of credit from a reader and will answer his questions in our next post. They wish to know if it is better to charge everything to their credit cards or if they should just arrange for a line of credit and use the line of credit to pay for all of their renovations that they are planning to complete in their home. This is a fairly common question that many people have as they plan upgrades and renovations to their homes.

Credit Cards vs. Lines of Credit

Question to Debt Counselor:: We are planning on doing some renovations around our home. The kitchen will cost about $8000 , the bathrooms about $5000 each and then we are planning to upgrade the floors to hardwood. They have carpeting which has seen better days. The roof also needs to be repaired. In total we are spending about $30,000 and we are wondering if we would be better off using our credit cards to pay for these renovations or arrange for a line of credit to pay for them? We do not have a line of credit now, but could arrange for one at the bank.

Our credit cards have enough room on them that we could charge all of this to the cards, but it would take some time to repay these amounts. It would mean that we would carry an unpaid balance on the credit cards for several months. We probably would pay some interest on the unpaid balance at whatever interest rates that they charge.  This is our question.

Profile Review

Do you currently have a mortgage? :: yes, almost paid off

Home/Mortgage Loan Amount :: $25,000

Other Loans, Including Credit Cards:: a Car loan, a couple of credit cards with zero balance

Are you employed and for how long:: Work at GM for the past 10 years
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