Facing Financial Hardship Because of Coronavirus? Here’s What to Do

The coronavirus pandemic is unquestionably taking its toll on the American public, and while Congress is reportedly close to passing a stimulus package that aims to help in-need industries, businesses and the people alike, any kind of aid could still be several weeks away from arriving.

For many Americans, several weeks could be too long to wait. In fact, it’s estimated that up to 80 percent of all Americans live paycheck to paycheck, and nearly half of all households say they wouldn’t be able to cover a $400 emergency expense. It begs that question: What can you do now to get by until things are able to stabilize, especially if meet some of the above criteria? We have some suggestions on what you can do now:

Contact Creditors

If you’re worried about making your credit card payment, mortgage payment, auto loan payment or student loan payment, contact your creditors immediately and see what hardship assistance programs they have available. Some might allow you to make interest-only payments, while others will likely be willing to work some sort of plan out with you. You may even be able to sign on to a hardship plan, where you’ll pay a reduced amount for a designated period of time.

Use Government Resources

If you’re out of work because of the coronavirus, the first thing you should do is file for unemployment benefits so you at least have some money coming in. Next, you may want to check with your local authorities to see where you can receive resources for other necessities, such as food banks. In times like these, it’s important to just get by until the dust settles, and if you need the help, you should never be too prideful to ask for it.

Take Out A Personal Loan

If you’re confident that your hardship is only temporary and you’ll be getting hired back to work or quickly back on your feet following this time, then a personal loan may be worth pursuing. They’re offered by most banks, and typically the interest rate — while averaging about 10 percent — is still significantly lower than a payday cash advance loan or other high-interest loan. Typical payday loans can come with an APR of up to 400 percent, which can trap consumers into a revolving door of debt. If you don’t want to take out a loan, you can charge applicable expenditures on your credit card, though you’ll be subject to paying interest on that as well.

Tap Into Your Retirement Savings

This should only be considered a last-ditch option, but if you’re in a bind and have nowhere else to turn, tapping into your retirement savings is viable. The penalties, however, for doing so are usually fairly steep. If you take out a 401K loan, for example, then you’ll have to repay it within five years — and with interest. And if you opt to take your entire 401K savings, then you’ll be subject to some hefty tax penalties.

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