As of 2022, Canada consumer debt has risen to about $2.3 trillion in debt.
This includes credit card debt and loans that Canadians have.
When it comes to getting a loan, there are many different uses. However, this article will dive into the purpose of emergency loans.
What are they used for? Keep reading to find out more about emergency loans and how people use these.
Medical Emergencies and Expenses
One of the most common reasons why people use emergency loans is to cover unexpected medical expenses. Medical expenses are very costly, and many times people are not prepared to spend money on these expenses.
Whether there is a sudden illness or an unexpected injury in a car accident or other form of injury, medical bills can quickly add up. If you are not prepared or do you not have savings, this can be a stressful experience.
Emergency loans are able to provide individuals with the money that they need in order to cover these expenses. They are able to get the care that they need to recover and feel better without worrying about where the money is coming from at the moment. From there, they can slowly start to pay it back.
Car Repairs
Another common reason why people use emergency loans is for car repairs. While medical emergencies are usually unforeseen, car repairs are also usually unforeseen. While there are your typical mechanical and maintenance needs for a car, a breakdown is not always accounted for. This type of car repairs can be very costly.
To make it easier to cover these costs, emergency loans can help you get the repair you need. You can then use your car how you need to such as getting to work or picking up the kids from school.
Home Repairs
Much like medical emergencies and car repairs or unforeseen expenses, home repairs can operate in the same way. As frustrating as it is to have a home issue, they are quite common. Whether it is a leaking roof, a broken water heater, or a malfunctioning air conditioning unit, these can all get out of control quickly.
Even just one home repair can be expensive.
Taking out an emergency loan can help individuals cover these costs so that the home remains safe. They can also help you make the repair as quickly as possible so it does not get worse.
Unexpected Bills
They’re always going to be bills that are unexpected. For instance, you may have thought that you paid all your medical expenses, but you suddenly get another bill in the mail. Or, you may not realize how much heat you use during the winter and get an unexpected utility bill that is higher than usual.
Or, you may get pulled over and have a large traffic ticket to pay.
Whatever it is, emergency loans can provide individuals with the funds they need in order to cover these expenses. Covering them upfront will help people avoid falling behind on their bills. If this happens, it is harder and harder to get back out of that debt.
Travel Expenses
When you think of travel expenses, you probably think of leisure travel that you have the funds for. However, travel is not always going to be leisurely.
For instance, if you need to suddenly visit a sick family member who is on their deathbed, this is an emergency travel expense. Or, you may have a family member that just passed away and you need to travel to the funeral on short notice.
If you do not have the upfront funds to travel to these places, you can take out an emergency loan. They can help you cover the travel expenses until you’re back on your feet to pay them off.
Debt Consolidation
Another way that some people use emergency loans to consolidate debt. But what exactly does this mean?
If someone has many high-interest debts, such as credit card debt, it can be beneficial to consolidate these types of that into one single payment. To do this, they would take out an emergency loan and pay off their credit card debts. From there, they would have installments to slowly pay off the emergency loan at a lower interest rate.
This can help individuals save money because of a lower interest rate, which makes it much easier to pay off the debt faster.
Job Loss
Another time that an individual may need to use an emergency loan is during the time of a job loss. If someone loses their job and does not have enough savings, they may need to take out a loan.
These loans are able to help individuals cover larger expenses while searching for a new job. Instead of worrying about racking up any debt, this can be a way to keep it manageable until they get back on their feet.
Emergency Loans for You
If you find yourself in a predicament or in one of these situations where you may need money that you do not have, it may be time to think about applying for emergency loans.
Whether you were just in a car accident or need to pay for car repairs and medical expenses, or you need to attend a funeral that you do not have the money for, you can take out short-term loans to help.
If you are ready to get started, you can apply for a loan from Tekaloan.