A financial emergency is a highly stressful situation. If you’re facing loan payments, medical expenses, or repair costs you just can’t afford, you may feel helpless and unsure of what to do. While there’s no easy fix for this type of situation, there are a few paths that you can consider:

Use your emergency savings

A good goal is to have emergency savings of at least 3 – 6 months’ worth of  living expenses. When you do have to take money from this fund, it’s important to immediately start rebuilding it.

Use available credit responsibly

Look at the credit that you have available. When using your available credit, make sure you have a plan to repay the debt.

Ask for a gift or loan from someone close to you

If you decide to borrow from loved ones, consider signing a personal loan agreement that spells out the loan basics such as the amount and when and how it will be repaid. If you need help drafting your agreement, free promissory note forms are available online. A gift contribution may be an option, though there are limits before taxes will be incurred; consult with a tax professional for more details.

Apply for a credit card

If you’re in a short-term money crunch, applying for a credit card may be a viable option. If you do decide to take this route, be sure to find a card that meets your needs and have a repayment plan you know you can stick to.

Apply for a loan

If you have a relationship with a bank, you may consider applying for a personal loan, which might have a rate more affordable than credit cards. For any option you're considering, check the interest rate, fees, and terms, while also checking your ability to meet the debt payments.

Once you get past this situation, be sure to establish an emergency fund where you maintain funds solely for financial emergencies. This will help ensure you have a financial cushion the next time you need it.