{"id":307745,"date":"2026-03-01T09:02:28","date_gmt":"2026-03-01T09:02:28","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/307745\/"},"modified":"2026-03-01T09:02:28","modified_gmt":"2026-03-01T09:02:28","slug":"5-ways-to-pay-a-surprise-bill-when-you-dont-have-an-emergency-fund","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/307745\/","title":{"rendered":"5 Ways to Pay a Surprise Bill When You Don\u2019t Have an Emergency Fund"},"content":{"rendered":"

Editor’s Note: This story originally appeared on The Penny Hoarder<\/a>.<\/p>\n

One morning, you head out to your car and it doesn\u2019t start. Or, you have a medical emergency that requires major surgery. Maybe a pipe bursts in your master bathroom and does extensive damage. But you have no emergency fund, so how do you get emergency money?<\/p>\n

Emergencies can strike at any time. An emergency fund can help, but 37% of respondents for The Penny Hoarder\u2019s State of Savings<\/a> survey don\u2019t have one. That means for two in five U.S. consumers, when something goes wrong, they need a way to get emergency money. We have five avenues for you to consider.<\/p>\n

Expensive emergencies are hard \u2014 both emotionally and financially. There are ways to get the money you need if you don\u2019t have an emergency fund, but what about when you have to pay that money back? Or, what if you\u2019re more committed to starting that emergency fund now?<\/p>\n

We have some ways you can make quick cash below to help with both.<\/p>\n

1. Put It on a Credit Card<\/p>\n

Pros:<\/p>\n

Immediate access to funds
\nRepay over time
\nNo additional application required<\/p>\n

Cons:<\/p>\n

High interest rates
\nUnpaid balances can add up
\nPossible credit score impact<\/p>\n

If you already have a credit card, it can be one of the easiest options in an emergency. But if you can\u2019t afford to pay off the balance in full, you\u2019ll be saddled with the payments for a while. On top of that, credit cards typically come with higher interest rates, and those extra fees can add up over time.<\/p>\n

Bobbi Rebell<\/a>, CFP and personal finance expert at CardRates.com<\/a>, recommends paying close attention to interest you\u2019ll have to pay. If you have more affordable options available, it makes sense to consider them.<\/p>\n

\u201cIf you do find yourself adding credit card debt to an already bad financial situation, try to negotiate a lower interest rate with the issuer if possible,\u201d Rebell adds.<\/p>\n

She also suggests applying for a credit card with a zero-interest introductory period.<\/p>\n

\u201cSome of those can be as long as 18 months, which can give you some extra breathing room to work through your financial challenges.\u201d<\/p>\n

2. Take Out a Personal Loan<\/p>\n

Pros:<\/p>\n

Competitive interest rates
\nPredictable payments
\nFlexibility in how funds are used<\/p>\n

Cons:<\/p>\n

Stringent approval processes
\nOrigination fees and prepayment penalties
\nPossible credit score impact<\/p>\n

Personal loans are easier to find than ever. You don\u2019t even have to go through a local bank or credit union to get the funds you need quickly. Online lending marketplaces like AmOne<\/a> make it easy to quickly compare pre-qualified offers from lenders side-by-side.<\/p>\n

That said, a personal loan does come with interest and fees, so it\u2019s important to consider the cost before you borrow. Kathy Gilchrist<\/a>, founder and chief financial officer at Cardinal Bookkeeping & Advisory, said loans can come with downsides. However, she has an alternative solution that could save some money.<\/p>\n

\u201cCheck on whether there\u2019s a local nonprofit in your area with a program that could help with your situation,\u201d Gilchrist advises. \u201cI served on the board of a local nonprofit that had a program to provide short-term loans for people with emergency needs when all other resources have been depleted.\u201d<\/p>\n

3. Borrow From Your 401(k)<\/p>\n

Pros:<\/p>\n

Repayment goes back into your account
\nNo credit check required
\nLow interest rates<\/p>\n

Cons:<\/p>\n

Not available to everyone
\nLoans come with limits
\nPotential tax consequences<\/p>\n

You may be able to get emergency money if you have a 401(k). However, before you go this route, it\u2019s important to understand what\u2019s involved. First, you\u2019ll be limited<\/a> to the lesser of these two options:<\/p>\n

50% of your vested account balance or $10,000, whichever is greater OR
\n$50,000<\/p>\n

The best thing about borrowing from your 401(k) is you\u2019re repaying the money to yourself. You\u2019ll only need to pay interest, and interest rates are typically lower with a 401(k) loan. However, you will need to pay a 10% penalty unless you qualify for a hardship withdrawal<\/a> or you\u2019re 59.5 or older.<\/p>\n

\u201cTaking money from your retirement fund means that although you are avoiding paying interest to a credit card company, you also are taking away from your own wealth building,\u201d Rebell cautions.<\/p>\n

\u201cThe money you take out is no longer compounding and growing, and in most cases, you will have to pay income tax on the money taken out. It\u2019s also important to look at your specific plan details because some funds impose restrictions on contributions for some time, which can hurt your ability to build up that nest egg for even longer,\u201d she says.<\/p>\n

4. Get a Home Equity Loan<\/p>\n

Pros:<\/p>\n

Low interest rates
\nConsistent monthly payments
\nLarger amounts available<\/p>\n

Cons:<\/p>\n

Longer approval process
\nRisk of losing your home
\nClosing costs and fees<\/p>\n

Do you have equity in your home? If so, it could be used as collateral for a loan. Home equity loans and home equity lines of credit (HELOCs) can be a low-interest alternative to credit card debt.<\/p>\n

With a home equity loan, you borrow the funds and pay them back, with interest. HELOCs, on the other hand, extend a loan amount that you can use as needed during a fixed period of time, known as the draw period. You can compare your options with online lending marketplaces like LendingTree.<\/p>\n

But Kyle Enright, president of lending at Achieve<\/a>, said borrowing on your home\u2019s equity comes with some downsides. Primarily, you\u2019ll be adding another monthly payment to your debt. You\u2019ll also risk foreclosure if you miss payments.<\/p>\n

\u201cWhile some HELOCs are fixed rate, most are variable rate, meaning the rate \u2014 and therefore the monthly payment \u2014 can change throughout the term of the loan,\u201d Enright warns. \u201cFinally, qualification for HELOCs and home equity loans vary by lender, but can be challenging.\u201d<\/p>\n

5. Borrow from Friends or Family<\/p>\n

Pros:<\/p>\n

Flexible terms
\nLow or no interest
\nNo credit check required<\/p>\n

Cons:<\/p>\n

Strained relationships
\nLegal trickiness
\nTax implications for lender<\/p>\n

Borrowing from loved ones seems like a great idea on the surface. You won\u2019t endure a credit check, and your personal lender can even make a little income by charging interest. But this type of financial transaction can negatively impact relationships, so it\u2019s important to consider the drawbacks first.<\/p>\n

\u201cDepending on the relationship with your family, this could actually be the best option available to you,\u201d said Adem Selita, CEO and co-founder at The Debt Relief Company.<\/p>\n

\u201cFamily are a lot more likely to help you out in a bind and won\u2019t require any forms or credit checks. However, make sure you do right by them. Write the terms down on paper, if possible. The last thing you want to do is to lose family members over money.\u201d<\/p>\n

While it\u2019s possible to get emergency money in a pinch, it\u2019s important to earmark part of your budget for building an emergency fund.<\/p>\n

At first, make sure you have enough to cover car repairs or small medical bills. Then, over time, strive to cover at least a few months of essential expenses in case you\u2019re unemployed. It takes time, but it will be well worth it when you\u2019re earning interest on your funds rather than paying interest on money you borrowed.<\/p>\n

Stephanie Faris is a professional finance writer with more than a decade of experience. Her work has been featured on a variety of top finance sites, including Money Under 30, GoBankingRates, Retirable, Sapling and Sifter.<\/p>\n","protected":false},"excerpt":{"rendered":"Editor’s Note: This story originally appeared on The Penny Hoarder. One morning, you head out to your car…\n","protected":false},"author":2,"featured_media":307746,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[138,246,111,139,69,244,245],"class_list":["post-307745","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-new-zealand","tag-newzealand","tag-nz","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/307745","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=307745"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/307745\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/307746"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=307745"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=307745"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=307745"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}