Disasters happen. Without warning, a roof can suffer damages from a fallen tree or water can flood a basement. Unexpected issues like these can cause a lot of stress for homeowners, especially when they are financially unprepared to handle the repairs.

Safety First

It is not a question of whether these problems will happen, but when. This is why it is so crucial to plan ahead and know what to do in case of an emergency. The first step is to take the necessary safety precautions. For example, if there is a fire, one should first get every family member and pet out of the house and call the fire department. Or, if there is an issue with plumbing, one should begin by turning off the plumbing until a professional can come to handle the issue. It is always important to first ensure the safety of yourself and your family in the case of home emergencies and disasters.

Planning Financially for Home Emergencies

Once the necessary safety measures are completed, it is time to think about financial planning. One of the safest financial plans is to have an emergency fund set up. Having a fund of at least 3 months of living expenses is generally advised to cover any life changes or emergencies that may come up unexpectedly. By already having an emergency fund, in the case of needing a major home repair, a homeowner would have this stash to cover repair expenses without impacting the home’s regular cashflow. However, a large percentage of homeowners are financially unprepared to pay for large home repairs. If this is the case, it is necessary to explore alternative funding options. Here are three financing options for homeowners facing unexpected repairs.

1. Personal Loans

Most people head to their bank first to apply for a personal loan. Before making a final decision on a lender, homeowners should do plenty of research. This is especially important with personal loans since loan terms can vary. When researching lenders, one should compare rates and fees to get an understanding of the total cost of the loan.

It should also be considered that of all the available borrowing options mentioned here, this is not the quickest as the application process is extensive and there are often tougher applicant requirements in place such as requiring a higher credit score, longer credit history, or higher income requirements. If there are repairs that are absolutely essential and need to be completed immediately, homeowners may want to explore other options.

2. Borrowing from Friends or Family

Homeowners should only borrow money from family or friends when it is really needed, since financial issues may strain a relationship if loans are not repaid when expected. Borrowing from a close friend, however, can be a good option to pursue for those with bad credit or those who may otherwise not qualify for a loan themselves. When asking friends and family to borrow money, request a minimal amount that would help offset out-of-pocket costs without placing the friend in financial strain. It may also be helpful to request smaller amounts from multiple people, so that the burden of the loan is more broadly distributed. In either case, it is important for the borrower to be honest with their friends and family about their needs and their ability and timelines to pay back any borrowed money.

3. Installment Loans

Installment loans are short term personal loans that can be fairly easy to obtain, which makes them good for emergencies. Credit requirements are less stringent with an installment loan. These loans are usually available for relatively small amounts of money from a few hundred dollars to over a thousand.

Repayment is flexible and is broken down into weekly, bi-weekly, or monthly installments, depending on the lender, and the entire loan should be paid off by the end of the term period. Term lengths vary from lender to lender, and sometimes from loan to loan, so it is important that borrowers review loan documents and agreements carefully to understand their repayment obligations.

Major home damage can happen at any time. If homeowners are not prepared, they can easily become overwhelmed with thinking about how to pay for repairs. However, there are short-term lending options that can help homeowners obtain the money needed for their home. If necessary, homeowners should consider all of their borrowing and financing options when making a decision to take out a loan to fix their homes.


The content on this site is for informational purposes only and is not professional financial advice. MaxLend does not assume responsibility for advice given. All advice should be weighed against your own abilities and circumstances and applied accordingly. It is up to the reader to determine if advice is safe and suitable for their own situation.

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